NWPX - Earnings call transcript Q3 2020

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Operator

Good morning and welcome to the Northwest Pipe Company's Third Quarter 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Scott Montross. Please go ahead.

Scott Montross

to Company's welcome earnings quarter and call. conference morning Northwest third Pipe XXXX Good Scott I'm Montross, of is name My and the President company. CEO and Officer. I'm today by Wilkins, Chief joined Aaron Financial our access By to was now, yesterday, XXXX P.M. X, approximately November you all should issued our press release, of earnings which X at have Eastern Time. and being This available a call webcast, is replay. for is it

obligation materially. future XX, As discussion Please joining forward-looking the Thank XXXX seen results regarding begin third to our call factors made on we which results have begin, fitting this to most differ performance. actual caused that our I'd call materially downward. our to could year-ended for risk with COVID in and our like for delays we've refer to pandemic, other are related from our the recent no remind could for update you a backlog statements, SEC filings a such statements. moderate to our differ results. to everyone for XXXX quarter to that statements our Recently, undertake XX-K expectations. our discuss forward-looking expectations today of I'll the actual half review cause any second partly of Form and December We

project these delays. However, not cancellations, are simply but

$XXX confirmed As end the of legacy including September at million of of XX, Northwest end $XXX our of XXXX. the third million at quarter the and orders Pipe compared XXXX the for million backlog, of business, quarter to was the $XXX second

very backlog As we've backlog. million strong to over is $XXX a any say, continued historically

$XXX the which last the million. nine backlog million during have We $XXX $XXX been has between fluctuated and over time million for quarters,

ending high $XXX standards, a quarter historical backlog. by million third is, of very backlog Our

slower for book of remains precast time into order the seasonally the elevated even our business year. as we move addition, concrete In the

year-over-year this million were to sales a year. $XX.X the in late were and $XX.X contribution profit which of assets, Third January gross Geneva positively acquired margins helped in contributions and $XX.X impacted a XX%. that positive quarter net a our Precast million from and margin from increase Strong exceeded gross slight Pipe million legacy by of Geneva drive dollars

Our steel shifts timing, to partly negatively job XXXX in was COVID-XX-related pressure the legacy pipe by third in factors. of due impacted quarter business

pressure While the projects, steel inherent have pressure and the jobs legacy the the Luis to highly Mexico, taking environment. for Rio shutdown complex has momentum, and for San approving affected business longer pipe pipe plant been of with for bidding macroeconomic impact process SLRC a of the residual sales net transmission the lesser challenges Colorado, or To water extent, government-mandated by in fluid steel were current our engineering due short.

of production we XX, pre-COVID-XX As we've July back employees resume at to to safely work. and XX% bringing after steadily staffing X, back partial SLRC June are of on ramped authorized to up of as levels all discussed, operations SLRC our

As backlog the operating the a pre-COVID-XX we exceeded result facility, of large facility. have since at at SLRC levels our

The it and in of strong demonstrates both year-over-year business COVID pressure remain the concrete precast a in and gross steel legacy helps of pipe in business, which the helped dollars. the business to business Geneva of during through offset transactional precast nature decline revenue elevated We balance concrete profit increase to production growth the business. year. volume choppiness Precast continuing diversification revenue performance as see strong legacy This the expect the was SLRC are due our by and periods strategy, in at key at our environment the will the element offset current

have margin resulting of the fourth have third quarter moved as the be of delays into and revenue a work into move profit number gross out there quarter been we that year, than As quarter to expect the the XXXX. lower fourth customer-driven we project

we and growth and stable our now solid business I the into as of like remains would structure out strategy. demand However, our remain of a market strong. two-pronged discussion to XXXX, projected to is look turn to

our remains First, key transmission core water strategy. pressure our business steel to pipe maximizing

made in over progress the We last programs. significant reduction manufacturing-driven on reducing have lean focusing costs project years three cost through

are maximum that Therefore, aware, As with to and optimize a shareholder goal steel value. $XXX have this many annual is our business pipe million drive opportunities to to we share in of pressure you million an approximately or are XX% acquisition market, $XXX market currently in of the fairly between that limited. continue business order market expansion is

of to concrete January precast $X.X billion of is water-related has traditionally strong Geneva book business an billion strategy annually. is Despite the elevated market. the complex the demand current this addressable our year to acquisition well, the with concrete We as precast $X and year. of part The Pipe had up precast order prong Precast. held entered second in revenue environment, and head this grow in the U.S. we the into slow driving in The market market even of

California SWIFT expected potential, opportunities to as the programs expected Central Texas projects. high-margin program. stations, begin profile. large In program represents Metroplex. program like another program working treatment Water continuation water both dam in to now Lake in XX,XXX Houston regional Construction in focused is Harris pipe. early design pipeline supplies XX,XXX Texas funding the organic to and We multiyear, opportunities, those the that bid program lined for water market, cash County bond higher-margin water multiple to water been in superior potential projects possesses new of in concrete is includes much-needed commercializing XXXX/XXXX flow strong potential as ensure acquisition are or in multiagency tons state. representing pipe. begin on into to Regional of strong The new Authorities. margin of on and be will western The another XX,XXX fiscal built of Ralph good water continue at the to various solid XX% for year. is water and water includes to of with this currently pipe market program expected in the well cash of the This representing projects. next innovative major market, the Texas surface the market a precast created move within a late California's funding continue We Resources has believe XXXX. explore Construction in funds a potential significant North segments pipeline is Authority SWIFT current continue growth surface anticipate have opportunities. supply have a long-term one, Alliance year. Houston multiagency In is that now the facilities The a Hall and $X for organic look the tons the sustainable RCP funded is manholes I The for Metroplex Regional asset and represents applications, and XXXX, has flow strong tons According beyond ongoing to billion XXXX turn transmission tons next efficiency an protections. growth we Natural corrosive as West characteristics, expected believe The growth in XXXX. DFW over use to Water Agency, authorities $X.X having to Trinity water is infrastructure Prop the has pipeline, major additional we appropriated to regional Water for XX,XXX program profile. upcoming Furthermore, reservoir projects and billion and District. in which pump project growth for that sewer We're Upper Regional also

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

been next has slowed received pipeline. The just shifting programs site's miles will It are project early pipe. representing X,XXX bidding be about original annually and programs for X,XXX demonstration in reclamation XX-plus of water the years. pilot identified XXXX. regional one rehabilitation not operating XXXX/XXXX. tons project water construction over from to is schedules, conveyance in Sanitation California PCCP begin projects COVID facilities appears diameter have result heading The three to with has facility funding MWD is recycle that as District. as the program months, one. and six Prop will a Currently, undertaking in of tons. full-scale Southern forecast the which involves in two and XX begin indefinitely large reuse current XXX-inch a over from to of facility and out three rehabilitation involve treatment their The storage the project will has reservoir owners of sizable largest The could reuse treat miles the We County from is projects LA XXXX, of schedules. conjunction These postponed, This in related. some

Fort River bid late two-mile bulk of to upon their The to has very XXXX. favorable, located legislative Southern proud funding Supply inch to moving [ph] session construction of start forecast Engineers Project. system. the adhering Project. expected X,XXX-ton demonstration commitment by Denver The are Northern an Valley Nevada of protocols design dependent and pipe, Water project to has In will pipeline If our Army the activity, on include early part to In summary, full of miles water forward program, Authority Colorado, spread COVID-XX. has Record of XXX XXXX plan. in started progress very Integrated of Water XX is safely the Corps of steel in final project Decision earnest or miles Dakota, has delivery approximately employees to the North north of begun the area. in A the XXXX. Red Collins XXX-mile This recently project tentatively for a southern health of the preliminary their of expansion which stringent are slowed miles for U.S. been tracking we to XXXX. prevent XXXX late XX XXXX with the XX- scheduled up of Supply with In help working is for commit ongoing construction the we is in to

execute While the might business the the few to of economy sheet issues we structure nature liquidity pandemic for of remainder positioned our Furthermore, operations transmission water believe for short strategy, the we well our our have remain strong of and and and critical the coupled our with challenges of broader term, in essential solid business the created XXXX to position. caused is systems, given have the provide our a balance beyond.

over strategic identifying on our we of three, volume; call Geneva the As to number concrete pandemic; Aaron, we four, and all priority margin who keep will taking every least, cost reductions the number to number walk assets; will the remain our to ongoing and I through during company. detail. continuing precaution but over the third pipe company; efficiencies number employees not one forward, integration persistent turn implement of opportunities to COVID-XX our safe focused the and financial move will of focus two, a grow on in quarter results greater at last the levels now precast

Aaron Wilkins

full and and comparability compared offer $X.XX assets the some $X.X additional third with Adjusted produced was in our $X.X share I $X.X items former third all settlement detailing million related safe the million accounting Scott, those in Precast. to healthy. $X.X was third as or third you're in net the for XXXX TUBULAR measures of facilities, share XXXX Included for year. in income non-GAAP earnings Please for income income by you, net hope the reconciliation million adjusted the performance income of our Saginaw the diluted the per XXXX. $X.X and our everyone. to well the third XXXX for color intangible start financial $X.XX of main for associated tax quarter million aforementioned impact on million the and of staying Products of costs with is adjustment net pipe in for of Pipe quarter to the the excludes items. good was of The of acquired diluted unusual million income will purposes. Geneva recovery net refer Thank I'll unique quarter provided remainder quarter per amortization Adjusted morning, of or net acquisition release legal at charges. quarter estimated the of of in as and fire, and insurance $X.X for Geneva associated

quarter due production transmission quarter and of since Due indicator the offset Geneva. achieved the a increased higher due other million at tax addition product in X.X% insurance Selling, quarter third between always administrative systems year nature not project million from million timing the to was or due XX% The nearly third in are Legacy in Our water in expected were year periods million the the general Gross of that and of of $X.X XXXX and due tons were of a which productivity in best items, We contribution of the quarterly revenues ton. and third third to million amortization XX% of in quarter rate these ago XX.X% to of from offset the sales slightly quarter fourth compared $X.X million third sales along the were or combined million When primarily with the primarily the XXXX, $X.X and with legacy the our the adjusting quarter that to from tons mix. in to in X% XXXX The on of we $XX.X gross from in to the expenses expense we and Geneva. partially level compared in price quarter. highly a the had million increased per represents profit quarter XXXX. compared year elevated XX.X% than highest production third compared increase the federal $XX.X the to the third quarter XX% XXXX, income $XX.X associated of profit of partially The to quarter. profit include the the of tax costs. costs for Geneva margins XX.X% Gross XX.X% manufacture, comparability are XXXX quarterly $XX.X highest third XXXX, XXXX. decreased margin quarter million to $X.X first by of been sales quarterly of to produced, net for in selling would gross was of the achieved increase Geneva, expect and to margins XXXX quarter of ago by state an third contribution in quarter plants. realized the recoveries. XX.X% was $XX.X for increase compensation unique have declined increased decrease by amortization rate in dependent

was XX% reduced third in rate the quarter was tax XXXX, Our in our changes the of by estimated which valuation allowance.

and of generated XXXX. our cash from Total amortization XX of The to million We Depreciation company's to totaled for debt sheet million, of balance very and the third for XXXX the $X.X $XX.X quarter available of September equivalents consisting quarter our liquidity line credit. third $XX million cash approximately The our We quarter. quarter transitioning from at condition. remains $XX.X the strong. in in of Amortization $X.X $XX Now financial end quarter. exceeded of million levels. of depreciation the million and of XXXX. cash expected the company's had million flows compared $XX.X at is operations with production during third varies of million million fourth the approximately $X.X

to primarily CapEx. to million we the is per million as However, expenditures amortization existing expected for maintenance assets of $X.X $X.X Capital ongoing XXXX. decrease move intangible quarter into and quarter totaled were the

expect $XX economic full capital on Despite by expenditures In pandemic. approximately financial be challenging We quarter the strong a million. project made our the third achieved delays backdrop results to we've year and encountered, short-term brought we summary,

employees the more the it third our Company the for now to session\ to importantly for will of great operator their company's Continued and Pipe all results, commitment making I thanks place safety but question-and-answer over quarter work. Northwest even to begin to to to turn a their contribution for

Operator

question Davidson. [Operator Brent from session. begin Thielman now will first D.A. Instructions] the today with comes We Our question-and-answer

Brent Thielman

Scott morning, Good Aaron. Thanks. Great. and

Scott Montross

How Brent. you? are Hey,

Aaron Wilkins

morning. Good

Brent Thielman

out any serve? larger into bids are specifically Thanks. Is are related. it one, of it similarities primarily sounds but these you're you're one, I you sort process broad curious seeing And like am more sliding? the of how markets related potentially you sliding funding the it actually Scott, the that seeing job good. what aren't right delays? there the seeing much types I XXXX, be just reasons pervasive there? in across seen or how you that as with Is the guess, jobs have of sort

Scott Montross

more bit No, things it working ones with stuff to of little or the the out where take leaking I think, a it's that and the drawings out get think I takes – environment whether obviously, time starting more we've done, And it we've stretch had larger seen remote the just amount enough ready. to the permitting get to lot from to and into ready. But time these engineering – just you in takes and relegated shovel to as released. what work longer that's quarter-to-quarter know, time seeing projects, moving up the get get to things really although, wouldn’t it’s we're a and a taking be larger time I queued just XXXX. projects say is are really only it larger

anything really not larger that’s is that’s from and work a bit similar is moving see XXXX. still pretty getting at XXXX year year seen into by XXXX XXXX a pretty of all. have a to We We good amount related funding that's the little

So making look certainly a year. it’s XXXX like solid real

Brent Thielman

Okay. the slower tends to mean, guess you fourth maybe quarter, be Yes, seasonally – I anyway. I for on it

that expected come sequentially. had to down So

your you that XX stood work from days where Maybe quarter Just you want for up to thought that. the get I isn't for just ago? could wondering to just if changed going feel more prop play a expectations it out?

Scott Montross

fourth has the of saying, holidays. that you're work the I time has out right there and in major Yes, in year XXXX. mean fourth slipped But by from the some are quarter quarter I been two think you the are into the where

really obviously, we're less. bit be this of it a little to quarter, quarter it's year, to a compare the solid a viewing pretty when fourth the quarter. expect quarter you which still But we third as Now, good

that's think look I way it. the probably So to at best

a steel to We in jobs related there's of tend seen you kind have and you backlog delays slip to. be to year. are next compound to bidding bit under or that the delays in and themselves of get enough little also customer, if delay get sudden get the trying stuff affect have able contract fourth may those that to a little out bit, not a a all but if and have jobs and And some slipped that the quarter, steel have may you're of then into delay, from started

have little we see down quarter fourth third the what So in a bit those caused to things versus moderate the quarter.

Brent Thielman

Yes.

with Another benefit from quarter a good-sized pricing. pretty

kind before, think portion the this what better to asked you're some as have a volumes improvement especially I I've the a moved can Scott, dissect of the somehow fact becomes pricing prices of of of that the see consolidation but XX% you bid as think is just of you seeing, environment versus interesting, I the higher start steel come that result back. – industry?

Scott Montross

Yes. a the obviously is – driven a that that, certain And this period at to third very we're mix and the the I you think in running extent period it's quarter. when large product look by

significantly lot have you projects pricing and a when have with different of So that costs them. associated

look about project real important different $X,XXX here seen bit maybe it ton. moving. $X,XXX has project For has So is a margins the thing real get tons, margin, mean, a look we're and really of because think of that have these of a so hard is on really, things to The we've the a is feel look example, most price we and margin pricing at that to the the we that I tons measure could the how pretty the does price XX% generating selling good many it's price and that's XX% have a is a level pricing things the as still fluctuate that's forward. margins, you way there's And right? much go around Or you really what small selling a quite handle has could way a as a amount that has like? projects, a

Brent Thielman

this on. of it just quarter. specifics Any I’ll looks more details it Aaron, the cash kind just this quarter? pass One around better I – flow like Okay. that of mean,

Aaron Wilkins

current has changed focus from assets. Nothing our on

continued things really, our So management accounts well have to there of and receivables. go

I kind a a a kind dipped – think normal inventories little working ebb our bit. flow of of things capital. bit our little with and That's just

based, large flows corresponding we've part, the of cash and kind just quarter in this out year. earnings some earnings So pumping third been and the of good it's realize

been it's good. So

Brent Thielman

been Geneva it? a big Has help to

Aaron Wilkins

bit, Brent. A little

certainly, think and I – our space. right now with I our precast business Geneva only they're think into plant first our Yes, they're of XX% helping. of certainly the about acquisition

see we little their I sort get bit more of scale a bit think there, more little conversion a effect cycle. we'll from once cash

Brent Thielman

Thanks great. questions. all Okay, the for taking

Scott Montross

Brent. Thanks

Aaron Wilkins

Brent. Thanks

Operator

Richard with next question Northland. comes Our Gus from

Gus Richard

thanks Yes, taking the question. for

talk much on contribution in and that's about can a gross helped of Geneva, you Just the bit how little the sort margin quarter?

Scott Montross

They're you high gross in we've of believe when this think, are pipe gone – be the pipe water toward pipe the to a gone the margins Geneva pretty on time. at as a we've quarter. onetime water side And as through any we've pressure taken, at said, the that this through contribution gotten minus I In thing, level gross with hits we transmission pressure XX%. Geneva margin where sense, line we've contributions might similar much that these we're the now contribution look the the it's pressure margin up Yes, point for pretty steel contributions. transmission of as contributions steel period a steel are what Gus,

Gus Richard

they growth about did think $XX again? that run million, there, ballpark? about strong terms Geneva Is way in $XX on XXXX, of you're we help it? the be Or of just then to growth a implying quarter I any Or not the Is that of it kind in of quarter? think should mid-teens of in seasonally of thinking and and million kind And a Geneva, current Okay. rate rate.

Scott Montross

January the the fourth of the precast quarter I on we acquisition the the Geneva, would off the to year. year. that Kind the when we're frame, is million say of Understanding time them January somewhere the the expecting got Yes. bit of we year around like little that business Geneva own call of we didn't so What in did be for we’ve slower million. business is take $XX $XX for on a quarter the time the generally frame

there lot got that growth a about our of precast you we've order in that actually So are the book X.X% for at lines business, held and as into remained seen of standards, a of that talked in quite things you or on a somewhere the forward much that businesses probably now, steady, starts well. the we've precast looking that's interest we're slow has some Geneva And it talked market I population which to across well business. the and at area of And when about the the order precast for bodes rate the move time of And right has moving of by as up with CAGR the they've reforecasting and and a height book. pretty housing a been certainly elevated as look the we year lot we're rates, think growth pretty is, pretty historical forward, we've the X% doing. how

making pretty So they're all returns. good

pretty So go for market a we as expect a forward while. we precast good

Gus Richard

play of rollout? California, How opportunity, Sorry, precast that? to business? then in And up see reclamation the about that your opportunity on XXXX? also do that talk can a that questions. does you that bit little you XXXX other lot a picking states? And a And it. in more Got does And is

Scott Montross

one. with first I'll get back to okay, try the Yes,

Okay.

for potable obviously, couple of what guess, it they're come of up. to come you quite to see been and seeing the to on reuse I projects board starting when more really time, We're water and those – of as It's just period we're now drawing treating projects. taking dirty probably in that's in water. reused XXXX the business, to are a start be that water So Those California a fruition. seeing

them some XXXX stretching see out probably into and of XXXX. You'd

much So in places. it's definitely we've than in California other prevalent seen more

– talked certainly California. prevalent States we've in the has west as other being of Although discussions about United some the but the seen it, Western the as places not what

the is So United likely States? should to part spreads Eastern more a parts growing go But we seen. spread going, think it And think but ultimately, to forward this grow in the only that's business the in not regions, I presenting pressure something – we way States. of those different the are in California, see to it United opportunities that's and that that other Central of does be and for think Western trend, to I in it's things to it's steel us – the that pipe. likely provide that

related applications. haven't the business at the point, seen to precast are nature any seeing mean But pipe of opportunities the pipe jacking We to various we there related won't. in business really and concrete side we things this doesn't which that for California opportunities precast that of are that

words lot that's of on the asked. So you question just a

Gus. question, your answered that hopefully, So

Gus Richard

It could helpful. for wondering not mentioned opportunities bit? then water just preform, And prepared for was And you wastewater. that I in if your comments, to, what clarify was referring comment just in does, very that you that me a was

Aaron Wilkins

to and wastewater. at It's nature. water that that $X.X drainage, sewer generally – look those we When are about it's to for business, related they're billion opportunities billion water extent, market, you things when – projects $X are those precast of talk to sanitary related the to some and Yes. storm in sewer, water-related

wide the range. it's So really

Gus Richard

me. from so all That’s it. Thanks much. Got

Aaron Wilkins

Gus. Thanks

Operator

next question Wright Trust. Our David Investment comes Henry from from

David Wright

and good Scott morning. Aaron

Aaron Wilkins

Hey, David.

Scott Montross

Hey, David.

David Wright

whether how and utilization five prices delivery the is have Pipe, up. any times you otherwise? with months, book. the in lot obviously, steel In a up say, comments order Can recovery Northwest capacity to your market steel over, recently remarks, three, steel And affected Scott, gone give the the four, has you respect referred or to the last

Scott Montross

point going the say the What significant around amount in is on there's the producers. steel right business one in would – a time this things major industry outages are of at I that now several of about

figures best to on is XX% XX%. of utilization is business in our steel So production somewhere area probably what the capacity about the in the

it's whether facilities relining that on quite down So the furnaces having a they're of things based or down maintenance, required nature. of bit for

the supply ton coil, little business. we at through months. $XXX gone move and up $XXX this hot is price, that's seen a we've in three time, or that based latest up you So of week, over the last look seen period When rolled that bit we've have as tightened the probably steel prices this a on the price significantly

that it's steel believe tons and So new big maintenance coming I continues as online, back bringing another finished the I capacity online. million whether companies steel river comes with are with X.X there's additional also online it's the outages some capacity believe industry. that

into adds So market. a bunch the that back

So it we the be some in prices go future. looks like there steel on pressure downward could near forward as

For we because us what steel we into that's XX% doesn't on go our bother numbers cost. a margin because on prices. us, It more like is like a project we higher revenue that XX% And when built all, higher prices like drives, $XXX million. $XXX steel up, than margin at million,

to relative abate times to What it to So side bit don't causes problem. think too start But I it when so out, in the like it jump it little And margin where near term. is more dollars. here it volatile, just lead moves disruptive quickly. in process we the that when starts gets will a bidding a more little the get steel when

David Wright

to were want doesn't the talking that at water. as geographic be Are you opportunities Gus more additional Okay. either portfolio? make company add precast additions? then you products looked for the to to And opportunities capacity then was the or about presently precast Or and expand would there that about asking

Scott Montross

product doesn't State in have geographies the business. to ship Because the demands. a Utah surrounding there Right – the and It's XXX the of geography is precast miles. states. Well, now, – is precast than XXX and is in local much relatively more generally business really our certain around

are look think also precast our have we many, And of Now at plant be It's there added that a things out they're RCP precast many are make systems building are plants, to through as question, think precast your there able product. different And the those many it's capabilities But can through products products Tracy markets, gotten precast to additional cast into be geographic that into. are precast related. out related some of there many, vaults or I portfolio. in whether some our be capabilities other you there, getting in that and control nature, at to a like product. products – could of at frankly, that I of new – to are more specialty more our that what's acquisition quite whether are but existing wet

thought about originally, them different billion think that. and quite billion was billion, – of you it But water market, $XX actually are if about it's in of precast water-related products billion. precast market, a is now, Some $X as it those structures. the market. $XX probably looking But to entire bit other like utilities a or the the we piece it's are because But $X.X bigger than

are Some products bridge of them that. and like things

the at of as additional So grow even water frankly, And the Geneva portfolio, it, water to isn't part of do are products water of you side even is that for and precast only up And products, entire some but that only stuff that relatively business water. precast a the not related. opportunities growing in in And we but water pick it market. in related. of bound also products quite are gigantic. not a but water, in product growth market It's the precast small you're there's that really outside isn't the now of lot

David Wright

it opportunities platform Okay. Well like to to find to sounds try great is into? Geneva other a expand

Scott Montross

looks. Geneva way the like We

thought least amount at tremendous as performing as think the we so… we well acquisition, we and there, when of it's a just potential think I there's did

David Wright

great. Pipe's Well, and your – the matter, current moves – the stocks. with user federally book I exclusively and lastly, in in we've Northwest's terms Northwest and funded? think, business? funding your steel in with a business opportunities customer Northwest that infrastructure-related reason for bit, end order is, around future any of infrastructure little and to and of Or become then that portion there business, almost a of little recently Geneva's for so-called stock Is is pullback would in seen Pipe would any federal that pipe too, present stocks pipe the grouped state generally the tends price local so the authority steel And get municipal water Okay. or related.

Scott Montross

state state federal funds. out are municipal projects, we or – are level funding those. funds the with EPA that there's revolving in level Well, any there's looking of with any – the if dealing issues. they're projects generally, they're you're And when state But those whatever coming generally, at, funds not seeing currently we have

looking look plan next three-year over we In this at is funding strategic company, to any the we're – the projects mechanisms in on have and here. that that be for package, is next believe now stimulus years, over in fact, XX% we're as out the could point look of some the already And already we offering three the at funding XX% place. as out or in we our infrastructure-driven years, three which the working nowhere

So around right kind those not funding issues. now, anything seeing we're of

David Wright

for And Okay, great. taking Well well. be my that for questions. thanks Thanks answer.

Aaron Wilkins

thank You too you. David

Operator

from Instructions] D.A. [Operator follow-up question Our with Davidson. next Brent is Thielman a

Brent Thielman

Hi But there is guys, some beyond the this happening. look it that, which any reverse doesn't prices, see end like work sort it steel thanks. mix I'll of quarter and well, trend, materially take a crack But as reason quarter goes. against where – this, collapse reflects at positive Scott, pricing which next guess I and XXXX? year could in last it's that this in

Scott Montross

pressures potential always there's Well, pricing. on

again, a pressure period on But bit Texas as in last but a we a As pressure is, demand, margins on large long of demand we're X-year time. Texas, we next times, where years, probably we've of little new that puts seeing region which such doesn't multiple talked that about really the starting what ultimately, enough a XXXX, look a up out at for in there's period facility for going think in in margins there's that probably only not our over for three that plan the a time.

we're little the California. in a which see of is probably demand about, bit two growth forward significantly And situation be largest a by talked driven that for have over you shift going California. to Brent, Western of is State period we've market may little a that demand where – thing bit that in other past we a the seeing three to time that next The as States, United the we the the of is a years demand go

always those the competitive are demand some are there things pretty the But lining with I way So right think up out things things. now, and there, there's it still solid. looks

Brent Thielman

let's should of larger Geneva it year. looks you year large in shift than not argument, to good region. steady, better. bid got It's ago. of mountain business it thought extraordinary quarter pipeline organically? least barring opportunities a what potential like pretty not something you there at be confident, Economy next that say if sounds Right. doesn't sake in a Do the looks the for pretty pretty materially, grow next the economy, feel you the

Aaron Wilkins

It's say strong to kind COVID of couple the go I in hard the you're looking the looks over out when still to of of business a to now, to as make able those environment Brent, structure statements say, definitively. is would next years. what be Right out we be

possible. to still It's looks affect be strong. it could Now that? But COVID

any projects that just are seen We moving haven't canceling, around.

hold as growth some we for midterm of M&A continue side And periods the at the looks which things pipe still continue long time. precast looks road, also positioned down we of opportunities the looking as precast the up, certain could the business, But at we're growth here. next business go strong. forward affect on period obviously, could it it facilities. three-year as the over Geneva like forms to the create And over be the and is to business pretty So

continue I more business the good side start it where and to a there's nebulous strong The a sometimes a be around very fundamentals because growing. period of it that to look time. is simply pretty that the going opportunity little strong going affect can be So it three-month quite company to pipe steel like the gets for looks bit pressure moving But think jobs that to – all or six-month period. a is

Brent Thielman

Yes. a extraordinary perspective, doesn't year there. so like Well assumptions from look will comparisons at make the this our line you have it – but we moment, top

Aaron Wilkins

Thanks.

Brent Thielman

Thank I you appreciate guys. it.

Scott Montross

Absolutely.

Aaron Wilkins

Thanks Brent.

Operator

to Seeing Instructions] Montross the Scott call closing questions, for over I’d like any back [Operator further turn no remarks. to

Scott Montross

future. conclude to I'd the despite the Well, still seen that delaying XXXX, today. near-term call needs thank water with continue you projects joining States of our are like reiterating that to strategy to infrastructure on our into execute United support again and into by well positioned projects for the very the we we've well

to very I've when look remain strong. continued into we bidding As out XXXX, is said, projecting activity be to

slow has straight year. pressure nine the remains $XXX steel been in And as quarters. time last we elevated the of backlog Our the our enter even for precast over pipe million

strong, remains So the business and of environment. a being despite in our this structure all pandemic

our the commitment and we I'd thank think like just as go you to strong speaking again again in well joining we quarter positioned employees execution operational with So we're for XXXX. for their look I fourth to on call. to everybody call the Pipe, I'd and quite And to forward. Northwest like thank forward

very thank So much. you

Aaron Wilkins

Thanks.

Operator

has conference presentation. attending you for The Thank concluded. now today’s

may You disconnect. now

Northwest Pipe (NWPX) 8 Nov 202020 Q3 Earnings call transcript