NWPX - Earnings call transcript Q3 2021

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Operator

Good day and welcome to the Northwest Pipe third quarter 2021 earnings conference call. All participants are in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note, being recorded. Please now Scott Montross. would like to to over conference the turn I Please go ahead.

Scott Montross

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

other As our to materially. call obligation quarter we SEC cause and would you discussion a to could regarding Please most recent performance. a statements. refer like remind actual forward-looking for today. are results to this for differ for of our such review the expectations and We with everyone future to XXXX year XXXX that the our that factors Thank joining expectations. begin, I XX, I XX-K ended December of risk filings our forward-looking update any in Form on differ statements the could for would made materially begin undertake our statements from like actual third to no results

quarter approximately in second As was the XXXX. a million, $XXX to the backlog Pipe confirmed including million third XX, record in water of near and our of September transmission XXXX orders for business $XXX quarter $XXX Northwest compared of the million

improvement backlog the led the to revenue XXXX. to near which than quarter delays transmission albeit quarter still on project rate quarter slower movement improve continues push Despite in back as and and out record ended we continued volumes, to a the third projects third of Our upward bidding, higher with into quality water wall expected the slower a COVID-related at margins.

a stronger through to start the to and backlog to and year-end movement lead on We margins XXXX. upward continue expect

the was quarter from sales due cash quarter an revenue significantly second was at to which $XX.X $XX.X stable but free increase totaled net transmission third million level. included primarily and million that revenue water Our versus Geneva. The elevated higher

quarter basis which that improved In modest pipe Our third versus improvements pace. the have some previous in steel began gross points. of approximately leading business, quality we seen steel XXX margins pressure to pressure XX.X% resulted the that improvement a products volume of the to the by bidding are pipe quarter at margins in the have of backlog rise in

COVID-related We delays are of seeing in are some that projects backlog. already still

and supply recent steel come However, a delivery improvement the operations precast largely concrete do. to elevated the margins related transmission and have and is points. historical have concrete our by The their which the abated to third to intended and business showed serve periods Geneva for still very prices, margin gross high for topline precast quarter exactly stabilizer water standards, have of as Geneva it begun issues was steel what during strong are off which slow

driving discussion maximize on business. concrete precast selected transmission adjacent a which market growth to pressure on focused Next, is second, related turn I would our continuing and two-pronged have water core the growth in like market and first, we case to to pipe steel strategy which water in our

we asset market. means strategy were what our have one. E driving growth all about are be it in led of of our acquisition adjacent including efficiency, against in potential, will ultimately a X remain acquisition continued a us year and which pleased to execute of We set growth very This characteristics, cash ParkUSA moving forward. of opportunity company, with for to strong this our our water a strong business growth identified which organic profile to to have an solid Through results acquisition and the team this we M&A expect ParkUSA. excited checked strong management accretive October good boxes stringent our top criteria, our strong flow to margin

that acquisition water-related technology conference the is distributes might develops, call that the infrastructure a those products. as missed last For ParkUSA solution products well manufactures have wastewater and water in as month, and water engineered market leader other control environmental

and from as the In offset increases periods assembled product pressure various space products are a product job our the in participation of majority revenue our mix concrete significantly to water in and control already customer balance addition, delivered assets pipe our helping and vaults the the variability further market. assembled. precast perspective precast-related better in our diversifies sites This sized systems Park and engineered environmental of then to portfolio compliment solutions steel

in home been and has million on $XX.X future size, revenues the market Further, context Texas. for EBITDA achieving potential approximately products value-added was adjusted which expected expansion million For process our Northwest in to months. ended strong XX The year XXXX particularly these within successful its approximately exciting Pipe. ParkUSA's the from given full growth is Park strong prospects margins of is existing integration underway well the take profit products $XX is its for in for with and

is existing for we which Pipe we water at capabilities steel the we organic which company. provide engineered steel specifically the Pipe potential water Since the containment growth we vaults locations. concrete concrete housings same into the products. product facilities, systems post-integration production our of solid products environmental of service some already employs related as a refer be production precast focused Northwest fabrications Pipe produce for believe units have the and our process vaults solution will we existing spreading ParkUSA that 's bringing Northwest plants, on ParkUSA of to control fabricated This current and Importantly, at will our Northwest and

a steel our RCP goal designed within hazardous on get longer storm our into include before rivers removing lined products include and to you pipe for focus to from these acquisition pressure commercializing in the environmental use progress business from corrosive business, products And to in updating for term it next efforts. Additionally, finally, new unique supports sewer look and that precast-related value of water or grow manholes sharpen Geneva can we We engineered our other ESG streams, integrate on applications. similar 's our to our this its solutions forward business In business we to benefit continue for example years. water will size Park ParkUSA engineered as lakes. driving the process and of the hydrocarbons currently An three are solutions of materials regard innovative proposition. our as

significant sold that believe these part capability of of products of can ParkUSA to locations. having organic and produce growth and addition product spreading products In we to our out the potential, these have some be also

prong shareholder growth business our value. transmission second water to to The is continue strategy to of pipe drive pressure our maximize steel core

cost reduction making are our to further through progress manufacturing and measures drive efficiencies. reduction We cost lean

As of the projects, XX,XXX Rocky represents in new North XX,XXX for project the program Water Funding dam creating a authorities. Significant project currently look of year another in pump water part program is District. the potentially expected multiple through of early multiyear, XX,XXX is Constructions reduction that Mountains legislative special The upcoming X.X-mile year. Red began Valley ton term. engineering in water In work I January stations the funds Water having completion. Act. reservoir was being federal design Houston from XXXX additional American program transmission won regional County measures We with to Water be effort, major at with outside Dallas-Fort segments on multiagency nearing to new tons the both XX,XXX is River Lake Water of The we drought demonstration Water and anticipate the and completion The turn six Regional both longer acceleration ongoing and acceleration to in pipeline approximately and the opportunities to will Project. for in with The considered, into dam authorities representing tons in or under in states water includes and allocated Supply current Central begun The water treatment West I pipe tons Texas in Northwest Project Valley resources bid begin in explore is the in Alliance a This projects. next awarded expected bid pipeline Upper construction additional and has and program Dakota, pipe targeted ton November region, this within Surface Metroplex. that for the the to program. the to of facilities. Plan the to Hall Rescue is will includes Pipe the years. XXXX, progress move East to will and now project is Texas made now a regional the continue River Authority XXXX. another the XXX-mile, pipeline large for pipeline, will on and multiagency the Worth, the Regional received be Harris the next built In Red Ralph Trinity X, North is remaining part part XX,XXX of late session as XXXX beginning on be representing

project. In by Engineers the as of infrastructure the $X.X needed One, the within are the Natural In been a XX Fort for year. XXXX are expected for Corps in the XX% Prop is the appropriated favorable, Army pipeline various the to region The miles north construction Rocky much start the XXXX California XXXX. may funding supply located of for Agency, state. fiscal XXX budget those tracking area. of to northern Resources approval we Denver from of outcome projects the come According an billion the tracking If of Collins further up has miles have to Mountains created bond projects California in state. decision of funds expected Colorado, of West is We for the of integrated closely water that record project of US

We we This California The projects remaining include the market regional Water continue and will District. next facilities preliminary treatment recycle steel city pipe. scale for treat expect full reuse stretch these activity the permitting three almost is conveyance facilities service demonstration soliciting Southern phases which major currently the XXXX MWD of to XXXX. opportunities requirements bidding MWD years. a LA program phases begin two X,XXX and of months. in of anticipates has secured annually water in Sanitation miles years. million been The of programs rehabilitation conjunction years. largest next San program costs. Diego in will expect PCCP see in over early which XX-plus as and the construction Water to California current heading The MWD of nearly of MWD in generated large as next XX% of program tons from the next design facility tons WIFIA Pure construction with new in reclamation over would out project diameter These bidding XX pipe. the reuse and fund pilot of $XXX operating is XX have X,XXX to and reuse approved year. the loan involves October result several for XX one for a in could about anticipated

slowdown We a have appears COVID-related. year, in this which work to this seen be

XXXX. from timing pipeline. is begin of It to received over is later the The miles involve XXX-inch will XXXX, storage funding shifted has to One. of project The forecast these water site's that in project So a this has projects XX year. reservoir Prop

Southern continues provide XXXX. permitting XX-inch the of steel XXX-mile were Nevada design the challenging in of includes program system. of approximately following their in we New Southern third Utah. In This the Utah, on for Powell design gain steel pressure of pipeline. pipeline Water over the an course final X,XXX XX summary, see Gallup phase In tentatively earnest is pleased water has and past alternative the Navajo recently this Bureau of quarter which momentum during pipe program, construction XX-inch the of water forward of on the bid pipeline delivery Construction to will expected pipe. proceeding has expansion with will with of begun pandemic-related part lake for The steel and to pipe our Reclamation's Mexico miles source Lake preliminary construction Authority backlog This southern year-end-a-half. activity, disruptions period include major of scheduled earnest U.S. moving in started for an mid-XXXX is project. tons Supply highly the

should optimistic stage stronger help set the us XXXX. We are for start this a to

the continue addition, strength in term. near remains level precast at all-time In our concrete an high and orderbook to gain should

very in are water for supported U.S. With by in believe we needs transmission projects. will be future well-positioned addition the of organic ParkUSA, we the upcoming growing that further the growth infrastructure

greater focus of precaution Aaron, I will integrating continuing turn quickly on your of walk to volume, the reductions very grow work with persistent to will customers, for ParkUSA. would on we safe our who quarter top Pipe integration Looking call results employees efficiently the safely. detail. will third our margin employees keep have taking so priority in focused Northwest I at support remain our much suppliers cost our Thank ParkUSA Company to possible, all efficiencies and doing continuing also pandemic, for strategy to business. all company thank of strategic the to a and you to our ahead, as and as our like completed we once continued over dedication shareholders through as ongoing through to now every at your over and of to opportunities the the the financial implement company and levels by executing identify

Aaron Wilkins

and $X.XX Adjusted the compared share net acquisition. income net million $X.XX Scott third of per release unique unusual and earnings diluted we Please to specific items will costs morning share increased increased to $X.X $XX.X you our $X.XX in compared of financial or XXXX. third shipment which the quarter million excludes in share quarter This of third million income provided the XXXX. X% $X.X per diluted Thank quarter to quarter in results. comparability to volumes. diluted the of in to good in our of Net Net $XX.X detailing net increased was $X.XX the improved pretax or per Adjusted million the $XX.X Precast quarter XXXX comprehensive due of reconciliation to to income everyone. concrete purposes. was the sales or transaction XXXX, adjusted third refer for $X.X the diluted and million non-GAAP begin compared compared a third and million primarily quarter financial with to included of million XX.X% ParkUSA million third of I $X.X XXXX. to measures income for $XX.X schedule XXXX adjustments. revenues in pricing share,

to higher XXXX. selling XX.X% raw realized offset impact or million quarter increased project currently and we decrease the $XX.X concrete. prices offset the for was the in resulting due timing in in of compensation-related tons acquisition-related due from profit resulting pressure price volume products. combination changes on pipe, XX% a the and provide administrative sales have decrease on $X.X million professional between XXXX of highly and of decrease sales produced, we from The product to selling of to per million for always of the associated The higher expense increase XX.X% third partially demand partially in a ton, decreased X.X% XX.X% the not general comparable offset Selling, mix. systems costs of X% primarily or the pressure gross by As compared our ton and Scott in the volumes pricing expenses to steel lower lower ParkUSA. indicated, by primarily strong third fees was decreased to by third partially and This to increased transmission nature XXXX. compared water and unique dependent profit $XX.X was for quarter increased with revenues and to $X.X in concrete million precast transaction X% Steel project they changes price quarter to costs production of are from resulting per and mix. timing. due production periods the do as Gross metrics tons manufacture, price Due project on material sales

middle the We margins expenses ParkUSA we statement expect gross to for point financial complete business. in forma greater will filings have December, pro the of and into the new for which at SG&A visibility

including incremental depreciation to will P&L addition non-cash In preliminary complete expenses, a providing we the allocation, price classification, purchase and amortization. also

is currently ongoing, total SG&A quantify at expenses projected this this difficult is As to work time. it

fourth have investment of operating XX% quarters for and I have downward the have approximately due fees However, in Full charge weather-related Park out first seasonality. $X ParkUSA transaction. quarter typically associated some the margins point banking that will and what million at one-time in fourth incurred year is we pressure the they to a with

items In was will $X.X addition we to expect the incur I nine purchase price quarter mentioned, and future previously significant allocation over the Depreciation expenses, amortization integration which for the be most next million. will months.

XX.X% in XX.X% third quarter rate third in the compared the was quarter to tax XXXX. income Our

We of year XXXX rate income are expecting tax XX.X%. a approximately full

cash the used our million $XX.X cash to transition flows with net provided from This million We and $XX.X financial during compares quarter. cash net operating will we in Now activities of by of third difference corresponding pricing needs to steel pipe XXXX. quarter operating business. our steel was activities for effect in due the its in The fluctuations and working on capital third primarily condition. pressure

XXXX, and credit capacity XX, September of $XX million before outstanding borrowing letters in our of of of our credit, facility. X. million As considering on acquisition was ParkUSA, cash $X.X our and million After borrowings had million outstanding closed equivalents we $XX which cash $X.X considering October on approximately quarter-end

third been ParkUSA credit Our related and availability, the had pro acquisition in facility been $XX would approximately forma amendment million. quarter, completed the have the

the the we pressure on conference Further, loan near company pressures cash stabilize through term on as available repay last steel manage our diligently working in to borrowing coming sufficient expect noted combined our quarters. month, aggressively our call we inflationary the capital navigate newly continue improving our the profile liquidity to of to flow As capacity and ParkUSA is and needs. business believe our pipe

issues slowing some million year. have Strains margins. our an the business have the influential for execute. to to come very $XX capital believe on to for for project in million. record spending, steel labor to million the continue we with the between have resulted are the They capital led year. the General them the $XX quarter teams of that and success Our But I for my of pleased supply $X.X we employees all congratulate our want will ParkUSA, markets be achieving their improvements chain this and in pipe pressure slower which and in which coupled point. gross forces, in we to expenditures to created third gained that bidding, with in totaled this strategy have quarter potential we revenue profit quarter economic challenges efforts and one from be are all several growth successful for performance gratitude express the financial has Geneva knowledge integration compelling the of that of piece important in we of equally and sequential

want importantly, employees, all over I our to including session. continued for which and programs, are now Finally and critical question-and-answer operator begin the encourage it those to engagement and most old to I our safety to the our new focus company. turn will on

Operator

Davidson. the Instructions] ahead. Karimi first comes Zane go question from [Operator And with Please D.A.

Zane Karimi

the Good Hi. solid congratulations and morning quarter. on Scott

Scott Montross

How are you? Z. Hi

Aaron Wilkin

are Thanks. How Zane. Hi you?

Zane Karimi

quick, Thinking how well. can products be months? you into you existing And pull next Geneva quickly Especially about impactful Real for Doing guys this. but how that ParkUSA that, the with precast ParkUSA. over XX and can business?

Scott Montross

with several it's at of a when what involved I big months, think, next integration be right. you first all, will push, look over the we

within we the broader different aligning are getting organizations into company. and functions people So the now

getting be until spread year we into early are going and looking are going next this not it's we really you right. probably at product to get So when

is obviously The assets we already have are concrete the precast Geneva look place we to first is peak going locations. at where

you are do think have within that the sure that's can are through we made with at a precast is making Park, water a an because go looking kind by which to things solution that's probably control you that or a system of system environmental product So I you vault.

control, done things. how be some then product that, how to get scheduling, able with through about and are that that to invoicing that production we shipping, have one, do you product Geneva, And looking idea product at now. involved got administrate there's two, you the the process, to be which do those So at we there's all training

we working now. through So those things right are

that going at some Zane, are that to I Not up before we steam. not to months to probably probably going several be be it's say, of would doing really So say it what a you when probably I sure least earlier than it complex. that picks little before, are existed bit that. But that not working it at product and gets take we call, would making hasn't through plant a a that's

before we impact probably facilities are looking an we that steam. picks on have the we year So and at Geneva think mid got up next

increase hard facilities it's what impact business tell the the X% at could Geneva it relatively Park's by is, overall to or XX% but So quickly.

do actually the pipe there's at is, also that can we perfect the system, other do manhole, is The at Geneva stuff for thing like perfect the Park that Two. we lining system

going in movement the plants steel growth steel there's possibilities way Park think, only across like look steel precast to can we do the pressure steel line some But And well at pressure there. plants our are at because the jobs. because is, have tanks of big pressure steel one facilities, for with pressure certain that plants to pipe our facilities the growth be So having we as at we but are are facilities pipe that even brake when as fabrications. I cement organic it opposite some we coat are potential too, pipe housings what products not fabricating at things steel that and each batch and some what has for company, like housed in steel our the pipe

looking at ability next years. solutions to are at the get that to potentially that steel encased the product, at over some point even plants pretty few pressure pipe the we concrete is So excited precast something the having

thing kind thought of kind that's process. ways asked, a versus this little have extended I you of the what out So but

Zane Karimi

potentially it that bidding you any is be seem This funding No, the is But are you need how next it? have to to picking you that could have I infrastructure and markets that you much. environment up? build competitive been impact very two-parter. tracking going as think these there one the now thought is for And appreciate it a projects guys would

Scott Montross

Okay.

package, address of there's me of The lead going out to amount for piece really systems, out pipe let water infrastructure the $XX There's idea a around for pieces the substantial the infrastructure major of be two in metropolitan So the water, the package, which first right. the getting of first. grid that part billion areas.

that billion billion takes piece. or probably $XX So of $XX that

So reservoir Supply subject Zane, We associated billion, what's are I things in pretty River of radar think projects that think other the States. and now the billion the western know, which gotten resiliency that's situation other talked are that will piece Water of kind focused is I they that's around do have that. years they like out call River a very job will list, really $XX in a And the some piece. on it, left, help in I really speeding to going you start those our the we $XX be or piece drought with the billion things that you of those site's that they as moving think job that's that I right up situation But important, mean may that we involved a examples in that California think piece, as some $XX funds and Valley additional United more these Red that things coming start drought because have speculative urgent probably resiliency Water they and maybe it are nature. drought speculative probably that on mean spun are I talk When more are job aren't in we the North the Valley is the is to I money think about form. Red what from resiliency to Supply mean, another Dakota few like, is, example or jobs serious a situations for is drought jobs now. its I just you some about

see some you parts are us are two there infrastructure So future. out infrastructure maybe much there's work, really if said, years Valley at going generally, into looking package more going are quickly two to to Water Supply are projects like or right this or speculative three kind significant that of I additional related immediate the going fund if and River to ones affect that a have those on pretty out effect, California these from that, now the But more this work to we be package. get these that that But confident we of things drought. is things in can Red to project are could like are

also of lot to and that a side to more the because there's Transportation projects of pressure I Department we little So think stuff. for new going are the play places infrastructure now to related on pipe to concrete go piece tendency create business. a I be precast bit the transportation into the that's demand has seeing what going lends be think steel that able forward with itself to precast than right even greater a package

here and the fronts we there's excited So package. infrastructure are about multiple pretty

Zane Karimi

how the markets is or into backlog competitive picking relative are the And second how of on kind And then on up? bidding that now both are Okay. the margin thoughts part, XQ, Great. the on just there? size your

Scott Montross

What Yes. lot did it year we a would in I bidding. more is pick second than half say, to the is this expected actually, up Zane,

going as expected a half. as was much improved didn't it thought We but to. versus we first half, what in second it really saw improve know the it we I big

relatively at it's look a bidding you when year. So XXXX, small

we I what expect than release, a not really the bigger, I asked saw we of, a a least in bidding it's bit earnings upward of time impacted is second happened. period say that more two fourth sudden, on the of in expect end about seeing a and out quite expecting first the And of of come And even to the that question the fourth script of What think, to holidays that the upward that have situations. half. right time to has backlog, starting by to we the half the kind see significantly as are I in what that, only we in reasonable somewhat we in of of year you at the think are movement the a bigger has are little, we of be the bit All said little And but think we hit been would quarter And and on recent pretty pretty through is years fourth continued still backlogs low going running the that a you say, we margins grow now, would and were and bidding is going as I movement little industry-wide hard. year. that the looks. based I and a how the pretty major quarter the the XXXX have demand as it's weather is quarter that got year the the landscape

bit a being right with we So cautious quarter are little the just of fourth because that. now,

we that think concern steel we down side, just are especially on quarter was third little bit pressure with over weather being the I about, And seen. things the talking fourth a strong. out are that's there relatively than pipe have The normally we seeing quarter and

last strong in throughout even stronger piece like weather, that in where business year. we When the think not be part the relatively and strong of still remain we the all look were but to because, has we be the for slow you in fourth go that's this last inclement the as a the year saw the to quarter what expect only going year said, quarter precast water at that I fourth with fourth year bit to the is year. quarter a we ultimately, than we quarter, precast continued holidays So pretty the transmission the

So pretty to expect fourth we quarter look good.

Zane Karimi

you. with areas last Thank new managing fourth And are up? how if or Okay. quarter outside seeing one constraints? And business me, through to with can. are Where I chain for steel margins picking regards through the you the you going supply XXXX of

Scott Montross

pieces. down see the now. upward I movement would we will to that continuing are Yes. on break this say I the into margins

seen we margin pipe the a relatively in pressure and XXXX. And have bids third a XXXX quarter last slow lot to through of really of pressure the just coming from are bidding pretty for we period With quarter remember, pick the of of slowly. second was the year It's starting steel pressure up. pipe there the out moving on piece, up steel

So little now abating pressure a that is bit.

year. precast So did at the we period after we fourth time. increase business call for we the piece, margin it that quarter ground is to at and go been has the gain the should relatively and when believe that, CAGR first actually has that through quarter, as but the of into to we as go the going thought we slow Geneva be the When to continue the this very precast over look call strong It stronger earnings conference business acquisition. than really even this year a Geneva looking or grown we

grown transmission of That to So the business. has in we to be and margin moving margin see business to upward. it transmission what very the to the appears in has water grown side to that to that continue water we and tried relation high have characterize

quarter right probably the coming through also And in at Geneva at Geneva the as high a at facilities see that of a when the past are at little you is seeing transmission water orderbooks. what to much I are of are orderbook where are fourth that they other as we far then Park, piece is relation of would historically bit Our now pretty thinking Park they have call a And margins. number. as the we looking margins is the what we all-time those, high backlog

to the quarter So through continue year. next all to fourth precast-related and the we into of as the improve early go margins expect we and precast on

and really big orderbooks, cases. backlogs with So movement the each in upward big on of margins one

Zane Karimi

It there. solid sounds Congratulations is up shaping be like a to XXXX really year.

Scott Montross

piece There was Did that. that? miss of piece more I of one one

Zane Karimi

on have a it. Yes. little You touched bit Yes.

a on outside of little but You touched chain steel? bit, constraints other any supply

Scott Montross

I below say, the drop script, Steel ton. steel okay. don't drops through When the $X,XXX to in Yes. come of abating. am looking hear off you think I now, will steel is Oh, we a I going a is right highs. its it's would like lot people at steel said floor, And say,

don't $X,XXX, something drop I that. to may like quite a think it's I be But think bit. it floor. to It's going the going $X,XXX, drop through

steel-wise, we are So I okay. think

with issues out United there media States. are the the widely the think in transportation trucking. that's Obviously, publicized across I

issue there's that. been So products through more get able have ship a able be of to able an to little need to being bit when you to we them. ship But

our at location our own at have and Park at the some trucks of locations. Park or Geneva We the got own locations trucks the

as for as an business, on So really pipe able major. deliveries where bit we a nothing little ones is steel the cement slowdown but a a bit in maybe precast the pressure But side. to of products, far of other the have little being get issue

prices seeing We not out of go whack. are

we chain really right transportation now too seen supply much haven't as sits. besides with piece So the the it

And we XXXX, with delaying things, is think bidding COVID-related. at quarter are that, are in those the I So one I say say. in look Zane, think into and you the I of of out I though, jobs that when third can't would a seeing lot delaying still

are I include spots. and being of to if those labor think chain you equipment to related, get some issues different supply able

in on jobs the more It's moving relation So think I effect with the direct. indirect to really makes that things, isn't if out those sense. us

Zane Karimi

Thank does. Yes. color. for It the you

Scott Montross

Absolutely.

Operator

Richard The ahead. Gus next Please Northland. comes from go question with

Gus Richard

taking Yes. the Thanks for question.

steel matter? couple utilization in How wondering that strength and moderating Just following business? I from you of it was and prices if of gross pressure and was the moving there was pipe up talk margins was from current gross in of much much the pieces. for on how quarter on could the a the margins mix

Scott Montross

to I started I as result, bidding. we the there's related pressure to to steel pipe, on have think, price was mean on on. not see And that's Gus, bidding a are competitors. as much on at more that environment the pressure backlogs major it going starting our improvements improve

to move the up margin bit. little a starting So is

moving bid originally to was that was going think everything we thought bit a into bidding actually XXXX. year out of delaying not and I more the would if quite it up be in the half second

be would said, bidding pretty it think significantly bidding moving think the because, a I faster up I ho-hum year. year this being like ended I that

Especially But backlogs pace. margin of while it's bidding percentage, industry-wide. are gross I I So starting price-related. the slow that environment going to that it's definitely look a the steel in I at say relatively don't improvement pipe would the and to think continue is way to going on more think the it's margin, continue, pressure steel

Gus Richard

sequentially bit. capital and inventories working? went then helpful. and a And help working looking Got spin there? Very Any come I wondering needs, cash of some down up that how receivables And am those it. just is quite will at conversion, off sort Or balances cash?

Aaron Wilkin

Yes.

I be think seeing are just on the probably we a next for assets contract what elevated couple relatively Gus, due pricing. at to steel probably quarters, staying of with levels you to going are spell,

steel average is consumed grow buying and closer ton. just a starting get which that, Our price currently is where to we $X,XXX are under to

percentage right where very doing current I first buy. lumpiness we am think into a get the Obviously, matter kind some have potential the a that all side, steel right our now. have the on trade some receivables to good our our I relates for on buy of orders the lumpiness with just a and trade pipe manage that backlog expecting occur are got pressure quarter. now trade that. big receivables, we we it probably as good We capital for very as out conscious steel are to on little for could fulfill, actively of working Inventories receivables our the side

we steel think good am facility. overall, are on on asset we think we quarter. to off of on I the our steady leveling of fourth are kind prices relates pretty are that and I the through getting the sort thinking as credit I some I it very level And of at balance be contract top should a cycle But mean the we higher nearing stuff. of these

have position we the liquidity So for in manage as think we I working here. got near a future good capital

Scott Montross

to, steel thing, Gus, starting and the other to The price starting is come down. it's crested

relatively As cash like think it topped range. into to out $X,XXX going at it ton. That's close balance drop a relatively to $X,XXX slowly to $X,XXX, going I drops to said, the because the probably bring sheet it's I and

come maybe So think, probably back several over you to looking going what a probably at, next balance are months to is we the are sheet that year. see, I cash the several,

too. going So think something that's to that's happen I

Gus Richard

flow quarter think, you $XX the Okay. in fourth to just be And clear positive no? I capacity is, you million currently. though, And your cash do borrowing be or think will

Aaron Wilkin

Yes.

I be, banking are to fourth that which talked have cash investment of going Jefferies flow yes, I unique for fee, think was we the be one think which outside quarter, I to going about, we are item the positive. the we

get I said, Gus. then like over the for the and from capital hump going leveled too, our combined off has think, the business I profitability working beyond and the that to is us quarter

that our obviously year. I this burned seeing working capital of think have we through cash the effects of in lot on a and

of think to we the at position the of kind that's already better in I XXXX for a top be holistically, because cycle. are

be So yes, this I think for even flows to improving beyond the going fourth quarter, business. are cash

Gus Richard

on for XXXX what growth on the business And and that think the business might already Perfect. just probably you ParkUSA rate the be ballpark? of just seasonality it. touched sort you follow-on for But and this. me then business, Got that a have for of

Aaron Wilkin

I the this events, but I bit say that weather year, is the in things normally, would rain of saw, not little like last lots a down. we earlier freeze rain, seasonality fourth think, slower generally heavy quarter. Obviously, year, slowed like

that quarter generally and a a So little fourth bit in holidays think and think weather probably quarter. the the divide have first more off it into the and plus were quarters, you think about if the you shipping probably year, bit that because quarter during the and And effects happens rate I slower about lap would four $XX about little of and last it you business Park's they million.

bit you do little have that. of in a seasonality So

Gus Richard

Got it. rate might the think growth what you be business And for on then that just next color year? any

Aaron Wilkin

Yes.

Geneva, on hesitate I if spreading with right are a now about X% growing line, business on you when organic we I looking look that based rule, we CAGR about any think But the probably at that a we think give product. that's X.X% to talked the going the similar driving at growth I growth and business to in rate work what about general Gus. is acquired just to at to as

Gus Richard

Perfect.

Aaron Wilkin

what the spread, in the product probably little But expedite say, organic may I would I think that a growth bit.

Gus Richard

much. That's it. quarter. you perfect. Great Thanks so Got

Aaron Wilkin

to you, Gus. to Good talk

Scott Montross

Thanks Gus.

Operator

comes question Henry with next Your go Instructions] David from ahead. Please Trust. [Operator Investment Wright

David Wright

morning. Hi. Good

Scott Montross

David. Hi

Aaron Wilkin

Good David. morning

David Wright

Remind me, what multiple? did EBITDA you pay for Geneva

Aaron Wilkin

It Yes, was X.X. X.X.

David Wright

Right.

paid for that ParkUSA. then right? Does So X.XX you times sound

Aaron Wilkin

Right.

David Wright

because component seems that buy am way? business. be thinking seems about I call, right that it going it to technology an That awful Park than higher, I like to the good Geneva what may the Am

Aaron Wilkin

Yes.

these the because I inside I environmental in about solutions. vaults it precast water systems think you definitely are mean, control these David, engineered are right way, thinking

So these engineered systems. are really

would talking significant patents, a are and I about you able property goes with effort relatively, engineering trademarks, of company to robust and along So a all that that to improve say, of multiple products. has be create a continue that what obviously, to amount these intellectual

with a got the that buy about think So right obviously, way. And you good are we thinking we this. pretty

David Wright

related all the said to of jobs the that mean was original one for be exciting. coming it's that And And pipe bid. a is sexier steel different Core lot of like could I business. up but Engineers yes. question, was not mean mentioned really to something, I is that it's correct? second project, I for water be Fort you which you potential Well, detailing or Collins, Meter you a a Badger thanks are going than think

Scott Montross

yes. Absolutely

David Wright

about a exciting. pretty miles of talk you XXX Can Yes. that little more? pipeline sounds

Scott Montross

a of development to Well, of whole go Corps obviously, there's the Engineers. has bunch Army that with on

eyes are think I our one on. going it's that to keep we

I of don't years, And remember things think number name a but used pipe, probably then facility to look there that miles done when probably slowed the I of and projects XXX know, have there. really, of in have we really were Denver can't about a the XXXX and projects we through the exactly years from used, amount big you XXXX for there obviously some of about project. over I the Colorado, down at that

the onboard, I same of not only there. came those kind the And but project. seeing is of with there what that of lot droughts, it's think Some are fires, projects things. a was And of it I the were before they kind situation, David,

up getting steam picking in we momentum package. the that projects but the that kind I Dakotas. And potentially one That's those seems be I part think resiliency is little I Supply River like Red the steam. Water Valley a of is think really also from said project of that of get had to project before, that bit infrastructure

is So because ultimately, the closely a very are XXXX watching those things that Fort Collins project are still project now. we right

think So the business. package a potentially could But are demand lot of will to then. in the over the It these next just years And now continues happen help do we things like add that infrastructure at improve. between can we looking couple infrastructure those. water and of And again, it. to looks it

David Wright

as probably pricing well? help will Which

Scott Montross

help will absorption production and and will help help will margins. will pricing and Which help levels

David Wright

wishes best and the to report both of great you holiday listen, Well, season. upcoming for

Scott Montross

really you. from you. to Same to David. It talk to hear was Good good to you.

David Wright

Thanks very much.

Operator

This for concludes will back over management I the question-and-answer now any our conference turn closing session. to remarks.

Scott Montross

everybody to And Thank like again call. for today thank I Okay. joining you. would the

takeaways. Before key want I you leave a to the we few close call, with

position right as are year end exciting in XXXX. go this we it's is is move water strong a seeing now and really us are enter we backlog that seeing what think transmission as of through a we I to the is and starting really putting pretty we

are the than to backlog. as due the be really closed things well And to the a excited at we think excited that are things. the they that momentum. a that spreading aligns those ParkUSA. strong. precast really high some with acquisition pipe orderbook very situation can business, we We on higher of happen of cash to attributes in have of is expect historically. before, and level with are where the post we a with them strategy again, with faster is are said XXXX also pipe-related We steel the are the all XXXX business stronger definitely to enter orderbook idea been significant velocity, strong. enter have a have kind from pressure Again, to continue we remains I strong. they Geneva the much business acquisition strong. And going high believe, cycle, margins did It product what and we the very Margins orderbook, seeing pretty has a the very to we position a the in And and and all like And other XXXX, with

call fourth again XXXX. like I for thank all look quarter to attention early and in you again with to on today So their forward would speaking everybody we our

you So very much. thank

Operator

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

may You now disconnect.

Northwest Pipe (NWPX) 15 Nov 212021 Q3 Earnings call transcript