NWPX - Earnings call transcript Q1 2020

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Operator

Good morning and welcome to Northwest Pipe Company’s First Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference call over to Mr. CEO Pipe and President Montross, of Company. Northwest Scott Mr. sir. the floor yours, is Montross,

Scott Montross

and by and to Good I My conference Montross, earnings morning am name am Northwest Scott our at Time. issued was yesterday, Company’s Officer. X, and XXXX, welcome joined Chief By Pipe you today Eastern all first of which Aaron have company, of press CEO access release, X:XX the quarter XXXX is I and President call. Wilkins, approximately PM should to Financial now, the earnings May

it This being webcast call is is and available for replay.

would Form to and on XX, ended recent expectations. statements, such the for I begin, we refer results statements our cause of future the the everyone actual discussion our to made XXXX, a factors differ XX-K December results As call that expectations regarding risk could like to actual most remind year could forward-looking that differ for are from for this Please materially. materially our

no results. We XXXX for to quarter first obligation Thank discuss our call you forward-looking joining our statements. today undertake update any to

Before the I member Financial leadership of role confident that for like successful his begin, CFO. in be Aaron a in Officer role been Aaron several new April. as has Chief and of has recently our officially we are Wilkins, valued welcome who I’d senior years, assumed team to he will

very future have Board in of will experience our will an to water I would growth our as in our markets and also like we Yearsley, market. Directors engineering And the skills provide on industrial to to welcome Director plans that are infrastructure elected XX. civil pleased on Bill support Board. him Independent key March Bill’s who’s

the our in quarter through operational update financials today COVID-XX our you of then Aaron greater we’ll with to start turn detail. performance. first will I’ll walk to review pandemic, then regard in and an

had which by on a been First of all those have the that economy. coronavirus, and foremost, the society our and thoughts has impacted major are with impact

paid Pipe rooms, encourage this Company employee schedules providing offering opportunities have measures increasing unprecedented all health break facilities, and distancing during of by accomplished sanitizing of and both and our or providing the high-use we employees staggering number to work As to to cleaning other our on outlined of social those safety their CDC; as has various to are and from surface are which in leave is some employees of Northwest areas; of at help well-being at either for who hand stay safeguard appropriate the time, by including sick been especially guidance employees, washing X at frequency sick sick home. the home; measures hours additional and priority, and of promoting workstations who caring our in outlined

any not and the of Cybersecurity of U.S. As the critical disruptions business in under major of plants Department coronavirus essential Agency. related water we have that Homeland producing Security products today, deemed to our infrastructure U.S. Infrastructure Security, the experienced the guidance at are

temporarily to due close water COVID-XX. Mexico in for to Luis the Colorado, However, San our Rio for by government April, SLRC of required manufacturing were short, Mexican month infrastructure we the facility or

steel X/Xth to or the SLRC result, total SLRC home perspective company-wide. represents into send of capacity forced better XX% we’re employees until facility. pressure our able a as to To And this pipe our we’re the put plant restart roughly

U.S. needed steel government stance pressure of the pipe agency. plant, Mexican We by are for which includes business of nature disappointed our being in a major at administered infrastructure construction the the SLRC water on project government essential the

quickly back offices facilitate to forward to as our look with and agencies reopening bringing and possible. multiple restarting in our government employees political safely and working We order Currently, facility. valued to we work as are

have Fortunately, future facility our orders more the at than the for current meantime. absorb U.S. SLRC enough in and plants in the we remaining to capacity

the extended the the and May, bring product recently through receive to raw government ship facility Mexican to materials. stay-at-home employees end have order The several of into been but allowed we

balance for our the unclear, position; of the water solid liquidity While well impact bidding these the is the standards; withstand financial that’s activity flexibility. of strong; high our duration COVID-XX challenging us due U.S.; which and in which operations to cost pandemic our XXXX future our remains systems by our nature to and believe we historic with nature variable strong essential backlog, remain the circumstances provide to somewhat to sheet positioned business very critical of projected structure, provides transmission remains and

very Importantly, first deal the note, we the that difficult improved deal period of with through current our took to and of I’ll a now the during XXXX of half quarter measures uncertain ability first XXXX performance. restructuring great environment. of to significantly that our cost-reduction overview On the turn

and strong quarters several strength our demand $XXX over with experienced above by seventh driven quarter results the quarter first backlog solid conditions delivered continued consecutive our million. in We last

quarter confirmed a $XXX of the XX, record was of legacy at the the first $XXX fourth million $XXX only the end quarter year-end business XXXX, XX our last Northwest backlog, was the of $XXX million backlog The backlog Pipe end for second-highest to of As the of orders March million current and of including XXXX ending XXXX. at quarter quarter the the ending of compared to XXXX. second in first years, first million

XX.X% Pipe in drive $X dollars. assets benefited Geneva profit year-over-year million Geneva January. sales positive from legacy gross late Precast of contribution in Net our acquisition an Improved our helped and from increase from pricing and a contributions

in the earnings first our with quarter of purchase and adjustments and line revenue margins taking projections Geneva the account the associated into provided were impact Saginaw call. with on our accounting fire, Before previous

also even as pressure delays were backlog to it job we standards. and As I’d revenue steel COVID-XX-related which affected March. like declined second our elevated impacted out profit, negatively the half remains sequentially anticipated, historic of by weather-related that delays projected, job by very quarter bidding first pipe issues customer gross and further point backlog, in in though

highest at head time its in precast the In the addition, into several for of pipe year. busy we last is level our book traditionally concrete the as order the business years and

will guidance providing all longer to the market high I’d to our be growth of in due which of to we unchanged. uncertainty due the take to COVID-XX, no you like level economic remains While moment remind strategy, a

Our approach is X-pronged.

in business; water acquisition our to of reductions immediately pursuing First, growth results. was pressure our of lean which XXXX, cost limited, we are the transmission steel on financial as on Group, known, Ameron accretive Water our focus core continued focused as our ultimately maximizing manufacturing well and led to but pipe This opportunities. two, July Transmission

with We limited pipe currently to expansion is generally acquisition opportunities. market, of a in the have XX% approximately million million steel market $XXX $XXX pressure fairly which

growth flow on characteristics This Geneva billion attractive market, the result, our chose profile. a water us is concrete the adjacent a XXXX. precast to led is XX Pipe an and billion opportunities, cash strong segment. margin to we As a part U.S. market our Precast focus second in of growth there in $X.X to superior recent We grow January and with estimate which strategy, to which acquisition is of $X

and expect competency in market a addition products acquisition our opportunities. of The provide concrete addressable we offering Further, future expands precast opens innovative will significantly core diversifies growth with further that of Geneva our organic Geneva the is cash expansion potential transactional much a than enhances acquisitions new and/or the business in the future. for transmission door near opportunities more the our profile. with business, cycle overall cash for water flow which The shorter having

Geneva, XXX-day has been plan, of through our well. progressing integration The

move as lean well as measures reduction help cost forward. to practices management manufacturing as implemented we have efficiencies We enhanced inventory and maximize

it’s too speak Pipe While programs. any of to the already quantifiable reduction from of Northwest seeing synergies, we early are results implementation cost

to projects. the has at to Texas funded in the area turn market, water programs long-term metropolitan for water like the upcoming last sustainable supplies $X funding regional continuation continue the X major transmission projects ensure years. now over supply current In over program program the I and water is of will SWIFT the in Houston Texas. surface billion to look SWIFT expected

XX,XXX segments XX,XXX in pipe. anticipate water of and XXXX bids representing in County to for ongoing of pipe for additional The is authorities expected program representing North surface We multiyear, authorities. water bid Houston having multiagency tons regional tons both multiple XXXX, Harris West

to to of new The dam a be begin for in another Upper built Regional is to is Texas that Ralph spring pipeline procurement District. project design pipe. reservoir Hall Water Lake is water new tons includes This Worth in and XX,XXX in Trinity into region. next major expected Dallas/Fort The XXXX. of move Construction program currently the represents

Construction and The Central pump regional tons water of agency Texas Alliance The begin pipeline, a is water in is treatment to authority includes another XX,XXX large pipe. and represents facilities XXXX. program. expected in multi stations program regional program

the of X Natural the $X.X Prop funding has XXXX-XXXX California’s been the According state. much-needed water California projects to have those projects funds In for various bond the market, fiscal XX% Agency, infrastructure year. the western as for of within appropriated billion created for Resources

for requirements expect these year. continue we several stretch activity programs on to next over the out market Water new generated bidding projects the opportunities in to have years. expect next reuse for which We California see the

over has activity bidding of a XX,XXX recycle and we in Bidding treat court from demonstration XXXX. MWD begin a of with could in of X reclamation the pipe. Southern heading as water large involves before projects water If current LA operating slowed, been The the would this facilities reuse reuse in project facilities up a diameter for construction see awaiting XX-plus labor program representing project one reuse end large treatment This has Sanitation early could resolved X approval of California as miles conveyance conjunction District. is tons. largest and sizable to is months full-scale the relate QX, regional pilot costs. facility

schedules. will approximately of not programs the but this to program year. have to owners years. projects, X rehabilitation some simply of the work next tons PCCP are XX,XXX slowed The in later These Currently, annually their the shifting X undertaking cancellations result over rehabilitation

miles pipelines, facilities. begin project The has stations pump is project is over forecast procurement identified X,XXX against The just The that storage the pipe. begun city from to XX curtailments new funding in and site’s a received the over Phoenix XA construction has Zone city’s projects River treatment safeguards supply program XXX-inch water of XXXX-XXXX. The This XD tons reservoir allocations. program. X. and activities will on of in Prop and improvements Colorado of represent involve It their water

Southern Nevada has design system. preliminary an This scheduled construction has which their the tentatively in include recently will with XX-inch Water XXXX. for delivery earnest approximately begun miles pipe expansion southern moving of part of activity, water of steel program, Authority with started forward XX

session legislative progress third the project quarter to in commit Supply XXX-mile of full demonstration has project dependent River bid The upon our has is Dakota, Red XXXX of forecasted North X-mile XX,XXX-ton slowed XXXX. Valley to the Project. Water on In bulk to plan. funding been

Colorado, of of If U.S. Fort for to in are in a final we Supply XX of XXXX tracking of project by favorable, decision record the up area. pipeline the north of The XXX Northern construction miles late Engineers In located miles Corps Project. the expected XXXX. Denver is Collins is to start Army Integrated

over commitment In like to their Company. summary, Northwest health at safety I’d Pipe our XXX to ongoing employees and for thank

may While its on our has in the been workforce our have slowed bidding not COVID-XX and it near-term, reduced. effects volume industry and

XXX For XXX,XXX tons XXXX, XXX job estimate versus roughly fiscal size current count XXXX. in a and of market we of a

on focused company. forward, focusing Precast margin driving and levels cost of Pipe reductions will continuous the volume, be cost at on improvements and we and successful move efficiencies Geneva we the over in performance of all our ongoing integration by and As

turn now through results to will our will financial who Aaron, walk the quarter over greater in I call detail. first

Aaron Wilkins

to Scott. with be pleased Thank I’m everyone this here you, morning.

been to the the whom of Finance to thank Northwest Robin her very like I’ve years. previously XX X with CFO over different for The Company role. President appreciates facets many leadership her company I’ve the As and truly as worked over know, I Corporate closely I’m with Gantt you learn over would my very having for served of years Controller. Pipe Vice career. now, of years the of also excited and contributions

comparability aforementioned million items. of XXXX. first net estimated quarter year $X.X $X.X is the in ago first $X.X share The $X.XX to Adjusted charges XXXX. associated the of include Saginaw from the results. offset quarter in of adjustments per million our in $X.XX net our Geneva; of $X.X transactions the comparable acquired recently by for costs in XXXX to in was diluted period. There production any with impact share diluted income turn for tax quarter per million unique or assets; or incremental provided Adjusted the of and costs $X.X items of income for adjustments accounting-related income purchase resulting million were first fire, million the acquisition those let’s from results Now for excludes the partially against $X.X net the compared not

to first due acquisition by first in produced, Precast of quarter $XX.X to due to from assets. our tons an Our price to of million the quarter revenues sales year increased compared a Geneva contribution in from Legacy XXXX the XX.X% quarter per selling declined and in slightly partially decrease $X ago offset Pipe million $XX.X increase XX% ton. the XX% million

increased from pricing profit million quarter improved to in the of Geneva. due or XX.X% sales margin or of compared to $X.X XX.X% primarily Gross the $X.X million XX.X% of legacy first positive to contribution sales and XXXX,

at million in fire production our facility quarter XXXX included first related XXXX. April gross the acquisition-related $X.X Saginaw $X.X Our million in and to incremental costs of adjustments profit

costs a we Saginaw elements of of final of costs sales, million settlement been XX.X%. Between adjusters, months. discussions the first Based our aforementioned costs the have of insurance the with to incremental quarter claim, margin, all the business now we unique of unrecovered. to incurred on affected percent We interruption believe by the in of the XXXX, on approximately this expect our Without would as remain coming essentially gross claim fire. achieve have projects and the property the $X

primarily XXXX related first first and to transaction Geneva million Selling, costs our increase incentive acquisition, were expenses. general $X.X to higher in compensation million expenses compared quarter administrative million of $X.X the in to with XXXX. $X.X The the was of quarter in coupled as due

expenses $X.X million the quarterly of between to expect the for SG&A million be We $X and balance year.

XXXX impacted compares in income by quarter in income. unusual valuation tax expenses allowance. due X.X% to high the of primarily of of with tax XXXX, Our equally acquisition quarter the unusually coupled pre-tax income estimated low This rate Geneva, nondeductible changes XX.X% proportionally was first with of the in of first to was rate associated which our

the expect be our year of XXXX, to approximately For full tax we rate income XX%.

and our flow. cash a first cash line and Now In quarter, our of turning sheet $XX.X X have a drawn Fargo. modifications, increased loan with from maturity Wells million that our combination and term to of the through concurrently aggregate $XX the date XXXX. and the balance amendment acquisition million down of loan agreement financed the October Among credit, other amount the on $XX revolving we included amended to to extended since credit million hand Geneva we and extended year by

in XX March million was approximately nearly at debt $XX XX March at available liquidity was million. million Total million, with available and $XX line Total $XX.X cash our on credit. $XX of

and remainder compliance leverage of our ratio in year. expect senior the remain was the with to Our negligible, covenants for we

of well Our suited vigilant our assets approach managing is type to this for economic current environment.

in this Cash company accounts back our December. on our to pandemic the goal the we exceeded open collections set point current percent have receivable of well expectations, the above remains for and

are factors, currently not uncertain the face sponsored positioned challenges do under we the these well seeking Act. times these Given and loans to government believe presented by anticipate that CARES we

quarter XXXX. included and cash generated million flows amortization operations of We amortization during first from $X.X of the newly intangible $XX which of acquired million, Depreciation assets. were the

is expected the not about fair In quarter of in The step-up million rate year, approximately accounting to addition for depreciation quarter. transaction the and from of for the assets. up brought value resulting quarterly increase goodwill, the intangible rate $X.X of prior material. per to per amortization purchase The $XX,XXX balance of was the $XX the preliminary $XX.X million in million on rate of Geneva be company’s the

CapEx. for $X.X used primarily the were ongoing for maintenance expenditures Capital totaled quarter, which million

conservative environment to the preservation in philosophy current expect with focus capital remain the in a our near-term. allocation cash in on We

slower which year For work our a for of the the hard necessary quarter, us employees solid of seasonally capital have financial been million of maintenance expenditures, full will and total million XXXX, $XX historically helped spending, be $XX to quarter the first we planned ongoing deliver has utilized and quarter approximately results. projects dedication first capital while

including the very to into employees acquisition of the our have now are talented Geneva, pleased culture. collective of all completed We integrating

market are provide and precast into our concrete We our prospects. diversify introduction will confident the growth business longer-term

our Thank Pipe a safe place for company to employees making ongoing work. of commitment Northwest again all your you to to

to turn to session. question-and-answer it Now, I’ll over the the begin operator

Operator

sir. you, Thank

begin come Karimi of will from We this ahead. Please pause [Operator have go we now the question-and-answer will Instructions] session. Davidson. At D.A. momentarily the our time, will to question just assemble we And first Zane roster.

Zane Karimi

Hey, good and healthy Hope staying morning, time. Scott this you through and Aaron. are yours

Scott Montross

Same you Zane. to you. doing? are Hey, How

Zane Karimi

you, Thank you. thank

little core sound quarter. with XQ acquisition, the like for growth a providing off, the of kind business down First it Geneva the

next thinking something through So expect res. Geneva replicated are about legacy be was about the we think growth I XXXX? given, that you couple business? XXXX Is of should quarters, through kind million it And the how $XX in is to of

Scott Montross

Well, look This last what we’ve the last the years we’ve I’ll second now solid say okay. the and for previous the higher right It’s was ending had you got quarters. quarter good like backlog in is backlog first highest several one was XX things only had the that a year. that is

bidding looks the XXX,XXX actually as believe bidding So with business quite we’re somewhere the right small. large it first quarter forward. But as relatively is we the stands this now, relatively level, was moving year. and stable, XXX,XXX that And tonnes between

created. in the are being uncertainty okay. going the things from of and that are look project So from coronavirus it’s around way the environment is things what look bidding, the Things to perspective the business forward. how looks of structure the Problem the with from moving like backlog, to able

if But structure carry for delayed. get continue saw the quite in delays to the of to to first on just We don’t an difficult don’t the absolute push, is all it. there quarter. well. It’s things business give jobs really it’s So some picture

revenue little first were of a that Some gross the which hurt weather bit. delays related in and the quarter profit

that saw around related also jobs delaying work like York coronavirus, that some were may that. City, things especially in we But New and to be being the done

the all virus does So there’s total a this the business just the but is myriad all solid of structure year. way through environment. really for the of here, It’s how factors there remain the impact to

Zane Karimi

of margin, Thank greater the kind And about then, talking in XX% conducive you through we year. developing I kind of were guess, that gross that. prior an environment for to quarter, or this

given in of the potential, kind the of should levels we kind out? about more How you part be year. the be pricing right, the the just of business And fixed slowdowns, talked are will these margin And business? cost aspect how to leverage latter current likely However, about like, COVID we thinking of environment? pushed able

Scott Montross

again, quarter things look when of that to at margin Especially, is affecting levels the on the are. lot what what of Well, went of the a there first fourth you from XXXX. up quarter end XXXX

with about, we the so are And that of end creating weather off get a done which the margin to XX% talked the us quarter. of field. pretty some up are bunch in caused the weather average have One, that range, to first in problems delays installation running the we Texas I because levels But in be had in the relatively jobs, couldn’t large margins.

done. and of in you jobs more amount smaller we also when overhead that push-out, that, that little bit other changeovers switching So what amount switching started we some the as the direct we because into early does of And had you were some absorption weather direct of less start doing issues that things jobs, get and efficiency. is a less thought. you because create And have labor being it some affected to and hours. Then

the up potential. relatively production impact margin. think more the going margin So have before, coronavirus upward can’t on that can’t I We much makes more said now, that will look again, lot we XX% the and okay a is like I it margin hardest with on are pick continue The as to right how a things us in to been why because a it’s tell long impact kind give pretty maybe of of we any situation then just picture look things term, front to reluctant bit of have that reasonable, predict little of a near thing of levels but ended stable, levels in we’re had us the and any in this bit clear little which – levels up as forward none thing, is is that this. And give kind difficult before. you with think the projections of of now kind

In are – flu has a fact, nobody’s – this few are very live seen that outbreak, the nobody from alive Spanish lot now that before. or – I nobody don’t people been is but ever

the difficult the So to again, I it’s structure said, a bit solid. business predict. like little But of looks

Zane Karimi

there. it. for appreciate I Great. color Thank you the

Operator

have of Gus Northland. And next, we Richard

Gus Richard

question. Yes. Thanks for taking my

terms the Geneva there backlog, million $XXX that any In number? of in backlog is

Scott Montross

as the bit Geneva work, orders way more significantly No. a business the much different little more is transactional. far a of as It’s velocity. It’s got Gus.

because, So order have pipe the them. pressure is lot steel a as of longer-term projects, pipe really an don’t backlog they know, backlog book, steel just in count you pressure that we and our

Gus Richard

then well? Got pipe? work makes pressure sense. of project in concrete Or That California, in some that terms is precast all it as reclamation the is it. And

Scott Montross

much of excuse – or all the pipe. ones we’re is at, pressure pretty From looking me precast perspective it that the of steel –

Gus Richard

Okay.

work an and from those Tracy. Okay. the to to have California reclamation projects? it some opportunity in precast you service and get of capability Utah, in there that Or is difficult Is some think I

Scott Montross

Yeah.

– the reinforced shipping on localized XXX have concrete market market. concrete are is pipe. a probably pretty radiuses We precast General miles

really it shift that it So – far. doesn’t

RCP product, RCP pretty that’s the It’s far that’s specialized really as webcast product. corrosive soil a a deep, As product for very Tracy applications.

It’s pressure projects. that. that fits the district irrigation pipe those of any really fit really would that So steel

Gus Richard

me. one billion $XX California a And budget, I think they’re it. last state then shortfall. Obviously, Got projecting for

the are projects? you I’m of a quite under to pressure. concern states bit you to other the – in municipalities what’s ability your and backlog on and are got future customers, Are about business seeing California. sure in finance You’ve seeing talking any

Scott Montross

was you that at looks not to related We’re virus. what piece this recession, and COVID-XX this hit would previous look a at look much in this And far you at daily this a versus of at the so happened faster. point this spending really – when that on interesting XXXX as this when the and XXXX, seeing the stimulus can calling really when The infrastructure And recession like, – with has one any this, an really the much end possible. driven of this lives stimulus been okay. stimulus the spend, taxpayers carry their that as so

The that for thing talking about the lot steel planned pressure out right and generally network momentum market And CapEx projects a momentum difference of the CapEx bit they’ve where of to X longer. these simply is versus like there’s it. years, pipe now, business keep like or years in different keep OpEx of this some probably X them large And has this the projects, behind little probably been about a CapEx CapEx And it’s you’re the so behind and There’s – or operating. functioning X normally, seeing the off. falls between to the have even X projects. OpEx is,

and the like which that the pipe stations pipe the will off, the in things system. going more is affected. think more of transmission delivery is the is and The treatment likely becoming that’s be CapEx, happening is in effective. of lot that almost which network that’s stuff seeing case, we think which in that is pipe And systems, operating generally this the plant pump be We to CapEx, going failures. will failures due network, it’s what’s be And to the like to a because and fall network all CapEx, of we’re the less

are spending the the is of in see. the floor which we future, bringing that obviously, period related that carrying through Senate And momentum keep behind – about stimulus that’s Public I Committee couple package cause X and through. know of momentum X jobs would the the normally you into that a that there’s that infrastructure bill So then years is to CapEx past pipe Works think the Environmental momentum to for another or to spending, coming

Gus Richard

Got it.

me. you. Okay, thanks. Thank for all That’s

Operator

with [Operator Instructions] Please Next we Henry Wright have Trust. ahead. David go Investment

David Wright

Hey, morning. good Scott,

Scott Montross

David. Hey

Aaron Wilkins

David. Hey

David Wright

Aaron. Hi, Congratulations. Welcome.

Aaron Wilkins

Thanks.

David Wright

that environment are Just presume essential? considered The and installed, you’re projects on being a couple I delivering questions. that of they’re currently all

Scott Montross

Yes.

David Wright

right? so. showing when about work, is and the project away variable whether is delays, up talk some weather-related just only Yeah, It’s then to delays from if do essential, are really enough you the people the

Scott Montross

Well, can a have bit you little that. of yeah,

little – have may maybe a in other permitting they’re the of people in home. that’s of at aren’t that because office slowdown from bit You and required there’s offices working those working

see this like from So little but that. have a a delay We’ve quarter-to-quarter of of slowdown bit from you can bit seen no point, at orders. little we in seen cancellations

David Wright

Yeah, bid so of you or GC. the on stress the to is sense on question at But their on that projects know have about going local asking basically relation have funding when them in and talking a your bidding I customer look these sort that to recently that on sources? you’re on, on you’re you’re what when be budgets. bidding you do or through, you the that state I’m look

mentioned by of bonds are through other projects you things maybe legislature. voters What of authorized of projects I of presume are on have to the you some range authorized maybe involved some sold kind have the by that in? water the of visibility district do the you’re or ultimate these funding be

Scott Montross

currently or advertised that funded be for next – is and are that projects we’re bidding, or in the that are projects. to scheduled bid, that all ones really, the year are to our are backlog are producing So order

that for through. those like and projects said has usually before, momentum least, – carry At got I a behind some So it, years. couple of

the we and a which obviously, slow based down we the future rates. rates across that And, delivery these a is projects But American of that Society is expect projects is things. network, – as on the are statements to States the of those know far water little of lot population and thing failures seeing couple the about a would all constant bit. you Engineers a what’s of is kind going thing starts one interest think and the that housing I is this growth in and network failing. the housing the the out a I Civil there coming talked transmission in As think But and [ph] of couple the saying of script, starts on in with interest we’re United [bluefield]

the I operating that’s of believe, OpEx become to required instead straight keep are CapEx. these CapEx So moving, to other like starting being versus projects projects, just system

have across to failing water systems to to or those spend going the grid operating larger dollars infrastructure going can’t or systems the You’re in country. continue are to systems the have to keep we the and fail

So fund they’re going those have projects. to to

David Wright

you question, to responding up, you the that caller’s saying XX%, or when when were you if And XX% say stable possible? the production levels levels pick picked more the are was that that stable levels production first they up margin at were were

Scott Montross

margin the looking, I – the perspective. What give better forward that backlog to we’re get the good you So a now. at the shape better what David, too because the going are, still where absorption, in the would point, from right impacts the levels, because impact better there’s is production overhead on the many we’re environmental not the margins say is

settle that’s the the of there think although, a on the now, competitors be I in we say what’s on of that of I is bit the work right there okay. down some with from And what and scheduled, and amount should bid, environment. that based our would little think, But panic is out environment going

still So, here. potential upward ultimately, that margin we there’s believe

David Wright

the for and luck. good commentary Thanks

Scott Montross

you. Thank

Operator

to our turn any time. questions further We’ll no closing for question-and-answer ahead Sir? Mr. the now at to session. showing go We’re I call conclude and conference over remarks. like would Montross this

Scott Montross

strong. Despite the with Xth ended strong I’d you circumstances see first virus economy, the through backlog a the through call COVID-XX today. our remains consecutive and the a XXXX. we We quarter joining to calendar the all over going unfortunate enthusiasm society again million. the the thank presented And of quarter, by Again, Okay. we to go very, very for $XXX with like forward as strong bidding business

the look We made opportunities you call you. forward through second we’re market, and in with Geneva, be market the Thank to And this stay again to concrete be excited possible significant growth in precast healthy. a and in August. participant acquisition that speaking the quarter And meantime, presents. safe the of on the very

Operator

Again, And you we time, your team care everyone. management may your the time this to thank disconnect also you conference call have is Thank lines. and concluded. great a today. day. you, for Take sir, the At again, and now

Northwest Pipe (NWPX) 8 May 202020 Q1 Earnings call transcript