NWPX - Earnings call 3 2023 | Northwest Pipe Company

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Operator

Greetings, and welcome to the Northwest Pipe Company Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Scott Montross. President and CEO of Northwest Pipe Company. you. Thank

begin. may You

Scott Montross

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

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

Thank our quarter financials and you begin Aaron today. us through outlook. you then detail. third will walk in performance review a greater all our joining with for of I'll

the and $XX.X SPP that of our in revenue gross revenue to onetime compared segment X.X% quarter to and remained expectations compared in due X% strong, $XXX.X declined million quarter below third from quarter, over coming fairly Our decreased impacted by quarter. margins the third year to improved million the anomalies to X.X% Revenue our quarter. second prior the year but both prior

well that previously some to the been had certain changes quarter. customer-driven of scope had as we third contract forecasted benefit changes as First, projects

impacting This levels to some encountered impacted at to delivery higher projects customer-related of into certain for plants further the production pushed revenue quarter out which the scheduled and produced also our margins in causing third delays early underabsorption, quarter. led project be short-term XXXX. We timing, gaps that

SPP in business offset in project addition items, In changes these sales partially nonrecurring tons to to decrease primarily due prices in produced, from resulting timing. mix our were higher selling by

Prices have third of by $XXX from which declined $XXX backlog, fourth was rapidly steel modestly quarter. from XX, approximately to but September September XX, June XXXX, XXXX. quarter, XX, from band of including the as approximately confirmed the from increased through quarter September $XXX XX% second million hot-rolled year-to-date XX% million declined million at SPP and at orders,

backlog bidding has Our even year. small historical remains been XXXX elevated by a though relatively standards

segment. Now quarter from reduced our all primarily as $XX million in while revenue turning raw our demand time as given and to impacting order environment market, Nevertheless, to fairly remained from million, prices X.X% of changes have absorption the remained precast lower of input fairly down market million September totaled and XX, book led XXXX. we June which precast from U.S. of fourth material elevated. million construction to precast overhead, rate decreased Precast strong the has down our XXXX, into quarter, current and a mix reduced was decreased the the period to the costs of year slower year as XX, selling related resulting of $XX XX, which XXXX, $XX interest progressed from product September due prior in as $XX.X demand,

quarter in gross the to down decreased third from resulting third XX.X% of of XX.X% quarter $XX.X a profit consolidated million, XXXX. margin gross Our in XX.X%, year-over-year

scheduled scope changes the gross anomalies and to including I realize delivery we of in to quarter higher contract to profit the project Our in declined into due SPP gross leading points that margin expected discussed, gaps changes customer-driven reduced by approximately customer-driven the plants XXXX, quarter from early changes primarily project certain XXXX in XXX levels that third And third under-absorption. production XX.X% created basis were quarter. be at and which produced near-term projects over just of third the to timing, out pushed

we been higher. approximately pressure project XXXX have starting that have our relatively are in Absent to projects that basis for SPP in market to bidding bidding. gross are estimate important on is margins items, currently Also see we SPP margins these small would points experienced that result the note XXX some we

interest 'XX of in the record gross XXXX. near precast by from which of rising in Our to to our the rates to record basis led changes and third predominantly markets, product product of experienced on absorption in we was precast the reduced reducing our the commercial had housing decline XX.X% This of quarter compared moderately of The decreased XXX the impact due approximately normalizing third margin sales the XXXX. resulting margins highs construction demand, mix. year precast quarter and in overhead residential points in

an on allocation capital priorities. update provide Next, I to our would like

that business in in of of service water-related business of of strategy focus solutions precast system by a for of the the this units capabilities environmental top at spread namely we have giving production strategy October remains our case growth ParkUSA means Our the water other housings same facilities, of products precast spawned ParkUSA the our vaults Pipe fabricated employs control the product which systems. acquisition organic priority our some and The with Northwest steel XXXX operations. containment on Park the the and of

and the has capacity worth outside year-to-date in of predominantly Level has $X.X Texas-based that, our of approximately plants States. Texas the the has Park production. our regions projects team ramping As and orders million Western from quarter. been booked such, Texas, XXXX, of out product And on effort year-to-date, X build to Southeastern team million worth second in the that maximize been $XX the million efficiency our of to of ParkUSA up utilization outside $X.X United approximately in spread To of end,

spread approximately because play produce in fabrication at we Northwest Pipe booked steel million Level getting $X we've projects, comes and successfully X into just were also vaults XX months, and the plants. Over the current we last concrete the product started.

products early Pipe locations, of company. the bringing to believe the production provide Northwest ParkUSA's stages As will incremental such, the to existing are we potential which we our growth organic in

As locations the organic projects the the product diversify to upon precast through scheduled and Geneva consistently more our legacy in currently more improving once production Pipe for growth. Level operations Geneva resiliency discussed, We Park our in X spread in product with Level as come. X previously at our XX serving additional activity. pilot plan the we to to strategy expand X established Park been at Geneva goal Park produced long-term Precast profitable comfortably orders Year-to-date plants. spread product are growth business locations to for cycles have with products XXXX, and further have driving we are remain Northwest confident expand our before products the economic of We on

challenges growth. we short-term of precast are believe affecting drive the making value long-term to Despite the in proposition and investments sustainable the we business, that this space

we only fully that to organic incurred integrated. finance debt of growth, remain but position ParkUSA are ParkUSA in the we further on highly repaying acquisitions, comfortable has order for focused after been Following to ourselves acquisition the

we currently related the turn next in in are continuing precast accretive space. strategy, acquisition M&A I'll candidates to which to seek our

this expected asset of continuing program prospective which And the to margin plan including in value. completed the right end growth We to such, finding date the and positive no evaluate stock time. recognize repurchase of we with organic While significant possess flow in goal as take Park high-quality opportunities to enhance by year, $XX has diligence cash characteristics, paramount, remains the expiration pleased growth are of the confidence of our be finalization due strong alignment potential ERP that integration solid million are to is and the underscoring Board in their opportunities system profiles. in integration, strategic amount long-term that our authorized shareholder a our with we efficiency

of M&A be under absence liquidity, our we any would to activity, the deem may appropriate. needs meaningful opt capital value stockholders the of business. Obviously, amended share our as repurchases and to availability borrowings subject facility to opportunistic compliance and including covenant return of we credit repurchases via our other In

year. summarize of our Before I'd outlook the for like I to conclude, the remainder

to that during ERP remains positive. XXXX given the current the business, implementation, rate had the impact we environment SPP continuing fourth on we balance Aside faced has our challenges such that resultant quarter I strong be that through, interest us quarter finish anticipate of XXXX our to XXXX discussed as territory, entered are of expected the in near and elevated this record of anomalies strong are the as into lead a that and our In from despite just some business, various backlog level our we for work outlook strength pipe customer-driven a steel with continued third a to which relatively and small we've reoccurring as robust seen remained through pressure carry our not has to We year. bidding backlog. XXXX the should well

over pressure months, small last environment project bidding has the downward caused on However, the few bidding.

the line also we encouraged pressure we activity on quarter such, of that downward a water of as seeing transmission As the revenue in with and by fourth we're in with to be I'd bidding but remain upcoming SPP larger our some amount margins. expecting expect fourth XXXX. currently are XXXX, year add we quarter like gross on current to projects

tab presentation, of which review can review website our within of and complete section. the a Investor be our found Presentations more For please the the Events on investor projects,

In volume. factors our anticipate weigh continue precast on to our business, macroeconomic to we

quarter modestly from the of to and revenue down As seen period, our in second quarter a in the precast we've result, third year be record highs, expected prior down XXXX. that to the but from similar with are margins what XXXX is fourth

the for position. benefit to We our for strong growing United pent-up spending residential positioned well precast our of States infrastructure significant business term housing, and continue market level a need longer is given specifically in demand to the believe

we and In thank continued our strategic nationwide summary, required enhanced leader water population years to in plan in long-term solid and increasing for amount I'd industry against U.S. like drive to this the value to the the growth. execution the projects footprint support of space, positioned as our are come. well our increasing shareholder to participate With team an in profitable to infrastructure

grow result, SPP As a related as to our business similar goal our for precast to size our business. remains our

integration at growth operating dedicated execution and persistence we've Northwest opportunistic you our once Pipe returning our and; to Thank for and share against in to the our repurchases. completed company work opportunities, M&A possible; the continued opportunities volume; team two, the value focused we margin at four, ahead, focus strategic ParkUSA Looking growth integration will all continuing to persistently efficiencies on efficiently of reductions company; cost over identify and as as one, to the levels three, as on: continuing for implement your finalizing quickly five absence of ParkUSA stockholders remain of for with the through safely. strategy

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

Aaron Wilkins

segment price Scott, Consolidated customer-driven to other Thank resulted with per you, per $XX.X anomalies third due begin sales well by million $XXX.X largely contract was in income $XX decrease which and of to X.X% XXXX. to quarter Steel that the $X.XX compared in This in or million as for of quarter. compared good profitability. $X.X to offset an year by million the I'll X.X% impacted was which overview a third per an $XX.X everyone. share third Scott selling or partially diluted pipe $X.XX was to in quarter diluted production the Consolidated net tons the decrease, as XX% million today ago discussed The sales decreased produced, mix. third to compared morning, net increase XX% pressure ton, million million earlier, quarter product changes primarily quarter decreased of share in XXXX. our in $XXX timing. driven

Consolidated of to partially shipment in volume a the to increase due product in the prices products sales in was primarily segment Precast decrease demand, to million quarter compared offset to manufacture, unique in volumes case decreased mix. do always comparable not of case in third of due or products. SPP and precast highly are $XX.X to for to XX.X% million which or by $XX.X due reduced corresponding dependent X% the third our production XXXX. sales between million changes of the of in we to an decreased segments the sales metrics compared of prices mix they on $XX.X both of $XX.X XX.X% volumes to the XX.X% and composition in the sales profit the periods provide quarter X.X% X% the XXXX, shipped Due million nature selling of as of gross

sales of that profit $XX.X Steel plants and $XX.X of in these pressure revenue compared for precast are product million delays. of while third timing to of the XX.X% XXXX, delays XX.X% project segment a changes XX.X% important $X.X to pipe gross It's gross due of pressure the from efficiencies million and quarter. profit timing XX% decreased due to sales. pipe steel production third to magnitude decreased million XX.X% XX.X% note reduced resulting typical expectations in primarily segment variance contract the or This for third business, of million of XXXX, Precast or or to $XX.X the changes to primarily gross our at in significant changes the of certain in sales from sales quarter segment profit mix. quarter or

our We construction have commercial precast seen decrease. markets

the held residential up to precast broader from better have our markets pressures economy. However, current the

$X of third in to The million X.X% of decreased expenses Selling, of general was in million or professional decrease services, implementation fees and and offset due ERP lower primarily the incentive compensation $XX.X in and $X.X million compared higher benefits base higher to expense. X.X% $X.X and or sales. expense, XXXX X.X% partially million including sales $XX.X million to quarter compensation by in administrative

year run of million XXXX currently XXXX, quarter, $XX approximately be million. rate expect our I Depreciation $X the quarterly year million $X.X continue the pace. expenses quarter general and of at expense the a administrative to ago amortization was For consolidated in compared to third similar and we expect selling, and to in the full

$X.X compensation the $X.X quarters incentive in million of million noncash Our expenses and and were XXXX, XXXX respectively. third

to $X of third in $X.X to the quarter increased expense Interest XXXX. compared million million

though half debt to variable balance Due rate of in exposure increase the of the swaps. risk-free rates approximately to quarter, our increased compared our interest decreased interest interest We even dramatic hedge the rates from our interest XXXX. ago continue using to year to average third the costs quarter

expense We XXXX. million expect of full $X approximately year interest for

an of was compared of income expense effective $X.X tax million, to income XX.X% in year or quarter effective in third rate the tax resulting prior rate income million an Our $X tax quarter XX.X%.

the rates were quarters for tax Our and XXXX XXXX nondeductible differences. by permanent of third impacted

full range to continue for rate between year We expect XXXX XX%. and tax our to XX%

will net quarter the net financial noncash by the income million activities $XX.X in compared working Now condition. adjusted I due cash $XX.X by XXXX XXXX to generated our quarter in third to operating of of We third for lower items. provided capital to changes transition in of offset million partially

We XXXX. $X.X to of million million quarter million expenditures capital quarter third full Our be CapEx our total $X.X of third the totaled anticipate in the in $XX the XXXX compared to XXXX. year range of to in million $XX for

$XX.X of As additional of $XX approximately million in XXXX, had our capacity our September credit XX, we on outstanding on leaving facility, line. borrowing borrowings million credit

to meet remediation with schedule. provide implementation, made Before respect I'd on conclude, remain and on progress continue to projects. With the update like ERP milestones ongoing we've and an I material weakness the the implementation to ERP we project

of year. MRP fewer gains and materials automation the by of are dependency improvement. inventories variances, We initial deployment end events. these advance will and the in our reduce working our I'm planning of on are process incremental team's resource proud of management workforce user the through in Physical data the broader testing which of labor-intensive business training detecting or

As Audit for material Committee. weakness top remains management remediation, for the this our and priority a

concerns sales of monitoring focus and have that arose development audit. related life We in while that year's addressing control manual internal noted robust controls on of system while failed cost Park at to to continue last instituted cycle revenue our failures more from we specific

of not the our impacted current results. financial identified the historical have internal Importantly, deficiencies or accuracy control

confidence results, position quarter Pipe. to to shareholder well it drive our us with team their enhance We also gratitude the ahead. and and their I'm begin some finish question-and-answer anomalies of even the continued safety growth solid employees remain year for our like session. turn in value. for in operator now impacted I to all continued program and the over our pleased for Northwest to XXXX very stakeholders our the will to made long-term encountered would express our closing, to In has I third thank our a financial prioritization steadfast progress that though we commitment

Operator

Brent from [Operator line first of Instructions] D.A. question with Thielman Our comes the Davidson.

Brent Thielman

about guess, the SPP, maybe like of And into on kind cases, could firm? confidence maybe of what quarter nature is. isolated It talk delays Aaron then the Scott, doesn't you're you schedules the Scott, sound but you it the experiencing? just I the first gives that are

Scott Montross

the that build messy before on fully And -- and pipe designed. describe is that Brent, and I to design quarter I it we are think contract way a projects mean means a contracts project the of the in it's these projects, generally or you're getting customer-driven from little pressure it have are scope. some bit changes was contracts which steel owner

So designed. forward we it go can going case that are as projects have XX% with result, design even go or normally, was And customer they sometimes And these you value XX% relatively year years, through project. this you think a a the designed. X.X going forward, I XX% a project. or large a with had Normally, in will this the the but probably time you're scope was like you probably projects, longer that build mean XX% with change these to but for as

build X actually like off design months. went and X that was It to

the That was the So project project changes X happening ultimately, the were scope reduced changed piece. what quickly and and was.

that And getting really first see be another quarter, see XXXX. but made we a was are large in was don't to that done impact. these projects while, The we'd relatively things up of reappearing. that other in having had project piece And yes, the issues design once the pushed ended quarter and X these these third that build was an supposed into

projects things them the as of design scale, move quickly in but as generally, build are a smaller have some happening the now. don't You

think to of I get in of little in the a a paid advance trying Brent, payments that business, stuff progress on we're promote and change obviously, there's change and bit things steel get and nature. because for

So little is have the to pay some are now, bit and of more in to. obviously out a caused come quarter. to third issue But these quicker move which we the what starting really attention projects that

part what Brent? of So the second was question, and -- the

Brent Thielman

of confidence think into was are for the just you these as the next it we firm early year. kind schedules the really get It I answered No, part Scott. that of the

Scott Montross

pretty looking been we're remind think of in I of don't you years. in past, think we year, like this margins to Yes, pressure right bidding probably to those this If what bidding have the you back right? when the pretty pipe has small 'XX, Obviously, a firm steel now. especially much saw 'XX, back 'XX too I and with looked years

the we we And which the in pressure they're of been in the market market resiliency one one in the which quarter that okay a not even think are margins I steel in really were we I change things obviously, into this the these is on the market, is of margins, configuration expect current of disappointing, market. of, to bigger that consolidation markets pipe but based do a a markets, to things with the ultimately, XXXX. of great bodes due exciting which as bit really in kind was for little which speaks small, the get mean business while this small, a big well part there's

bit in in to a 'XX that it market quite than 'XX. expect be bigger We was

shape pretty we're with that. in think good So -- so I

Brent Thielman

new on to Yes. Okay. impede given add just do these Scott, that that... your front, delays in And SPP business ability

Scott Montross

No.

Brent Thielman

still the allocated, though of Okay. it in. is can Even you fill production sort

Scott Montross

in I practical capacity have most coming handle of the enough more capacity mean to probably what's than market. Yes. we production -- out No. production

projects on on somewhere But you a Some of quarter, on in XX dicey XXX bit based out. be them pushed timing and gets things might can't being any given we the and handle little between different projects. producing

competitors. got stuff our of different nationwide have assets because the our deploy footprint we ability plants, and to across So a lot we've all plus obviously, around unlike of a move

Brent Thielman

of just lighter been on set kind precast, of but I and about. expect mean of just Maybe mean right could it'd the was what be the the we we for anticipated, look, there's of sort And these then level consideration think in thinking margins than understand you line you've business were you articulating were sales if I to be on where markets, we'd a helpful. some us slack some maybe little in margins the I as

Scott Montross

Yes.

I boom records think to a going that a on XXXX was I that everybody of was are precast. There lot -- for set probably business. was, compares right? what that -- boom year in was were things XXXX those mean

year, of off is the we're Going modestly in bit saw revenues through Obviously, that this XXXX. the off. we demand

we're obviously, interest we levels of of in changes have margin quarter, a those you second XX%. bit Maybe overhead versus both we're the the less think when You what quarter 'XX. start we in what higher all, precast reduced some they saw nonresidential think third little get And price with I the than a have part when you along were so demand, products mix, lower in the expect of residential business also And be, the in we product you absorption. the the were our you rates mean, reduced second saw at affecting levels. and you little that. all But lower look at profile about that that market I seeing are looking bit have now because for quarter precast have to the seeing with XX%, production margins in production some levels, pressure where I a about mix XXXX. product right And

markets, year. Fed And year think going especially in midpoint you're the through side. that. around start positively obviously, some of what predicting that they bit housing because a to rest next market things where little different and to we probably of only also into we is housing, I margins So we're next as there's now residential mid for markets are go respond they're with than seeing next be are the commercial what in interest going loosening to shortage go actually that but year, Not as going lining a rates start the the construction to a the year this which the the is the up think slower are little right to pretty year, the seeing

this So both steel significant that pipe precast seeing. think, like as coming disappointing, quarter like in coming said, us that through And headwinds the period seeing. the with as pressure in we're segment I again, headwinds the we're while, segment through this headwinds but we're the a well still I the with is decent shape for actually

we're the at excited about markets coming So us going pretty forward.

Brent Thielman

might to Just up Aaron. can Or you're this anomaly mean with an pretty about question, some into soon? this keep to anything Is have here cash unusual? you a because my I'm balance guess think how that XXXX. sheet if very it fantastic. this push little pretty pace going ought debt year cash the has last for be and that's in there's wondering I conversion we here there I been and

Aaron Wilkins

Yes.

better. think I performing say, I Brent, would what one, that is we're

pipe strive That its been and something business. of in bit bit a changed Scott do bit a capital work pain on, history. the of really And little for try steel company we we trying that. progress to point working a for kind capital especially customer on has the us but we're to that a there to moderate it's thing the kind here improve, and acknowledge needs think yet, not steel because we position to on we to continuing that we're should of little we to a that's that we're I and we're in where jobs to and of a making have trying be get different pressure little focus. really that, and acknowledge our working want mentioned prepayments, put of it

$XX I not that's had kind cash, when saying couple especially I'm I this bounces Now first like a free in the that think, a quarter. course of kind too, of think in we was it we of in I of year, just first -- think helped, good saw big the haven't the million of quarter,

have So in that's pay we've of things. stuff cash its kind good some had on of flows. I to relationship a the starting of a But the we bit business all think couple starting shift a for little and of dividends some customer all,

Scott Montross

done to obviously, that that, Yes, tied little at we've I to the Brent, that said, progress been of like trying because just all XX% And market change -- I you a of years bit times cash starting in little drive the in were mean, percent beginning upfront the add them to I time. the think to that a to lot on good is company, and steel bit. get range. with the to sideways when don't focus XX-some assets, the ago, steel payments, on that big a job And we seeing always get have back AR buy are area of paid Progress business. that I think another we to something getting make of mean, having really current sure we're across jobs the now we're for but the price jobs the up. we looking up with AR side the are in a I that we're on in seeing And go between XX% especially getting especially long pricing. guys pipe steel on several especially protect payments steel at time steel steel pipe the cases pressure

big right? company. want a as company change is the grow So to there, important going a that we do the focus, do too. to to to things forward Cash big It's us

Operator

of with & Company. comes Our Julio line Romero the next Sidoti from question

Julio Romero

temper mean the pretty that and you're mentioned kind demand Geneva to earlier mentioned guys are but that on some is where seeing from? stemming residential pretty has a commercial side you earlier Should the well? mix of product You we decreased, that construction precast infer has of that challenges well. the little up product bit ParkUSA held And hold up

Scott Montross

That's right, Julio.

into business, this the have we're from migration at cash has side obviously, little -- good that quite And how a They're always think piece the spending market. wise is, we the has net Texas, housing state solid. the plus actually obviously, Geneva side The in held of X the well good markets the is of the been of in business surprised always on we've of have interesting side pent-up been demand generated building. bit really pretty market I energy really Utah, precast good Utah precast infrastructure of the on business, they frankly, a Utah up right? because the that the

coming impact kind now look say, have bumping And of that's And those, the momentum So in decreased by probably spending side. while going you I think And months. I both But the more the if commercial Park flat. the But still index XX pretty it's about projects Index, at into September nonresidential in was Dodge right is basically And market that of at only nonresidential along. would up was planning. generally bit index precedes a the the And Momentum it modestly. what's little X%. forward. about

of commercial well time side. in a middle that The piece continued probably institutional institutional educational, strength interest gone things the And right start a good but institutional the off has as side. piece point kind a the the next is facing. precast pretty we're seen little a if expecting like we is the bit. they're we're projecting to in really the to more market And infrastructure And is strong fall like that quite construction hospitals, now, commercial what up a maybe year, like bit public of we've rates a bit, the moderate by hopefully seeing year construction as get

so demand really little like like a just on I bit a modestly. the pressure we're it the beginning, little pricing. And said not off bit in So lower, was XXXX, more is high seeing at

things all have about And with over XX well especially this Fed looks pretty forward, has interest how in It's like wouldn't think business I it's is based on But certain board. bit, changed rate the on that pretty interest well excited going across it's that that that mixes a environment and little year like in say rate doing. seen up we've said. you holding all, the have the way the that market and I last, the that the the hikes too, still But been we're done. headwinds

Julio Romero

out bit. maybe I maybe quarter? you you to in days Great. can taken speak and color next No, many Did good And might if really ERP the have you for that's little you downtime a many appreciate it. how then there. -- quarter how expect call

Aaron Wilkins

as we're one I improve that improvement to has that bit them stage do would a that we're for we're work of improved we're to see focus. and still integrity plants happening the point little at a going it than better a the to We're at process a this say, we're we obviously reason. better a that little business, from now MRP our at of at time. because little we're where eventually reinforcing were little bit we're to the mostly getting But through data, have there's what's have inventories, a Yes. transactional bit, is Park we've going get spending going place a But we -- for say continue of think, where, X but we're we're that of still to of so the just confidence to more the some think lot is obviously a days -- on a get say on year to something Julio, to kind little due far bit do, But where consultants a X kind I'd because some think, us I us better especially a forward, getting that managing them that's ago to as and automation. We're course been bit forward. this that's to of help I of pull going inventory an of more initially doing I starting not have through and going a inventories. getting that

Scott Montross

ParkUSA, quarter we think probably a I extra question X I launch. were a the do this business. was so little the mean, I go-live your probably bought first an at we days, spent probably for So days doing inventory say to point, had year would we of say And I to ago initial more we've maybe the kind quarter would Park answer to since a bit the because the on

Julio Romero

that sure. of we the share kind about you how when Got thinking it. uses? other then making you're some authorization, balance sounds the repurchase cash with And progress it deploying that cadence about reduction guys should and think And debt you for of just there like maybe

Scott Montross

Julio, can value. down that probably the our as flow, So the just think, the part focused Again, ask I to so about getting start million, this, at going is to we'll time shareholder a million we cash question program work go We're heard you looking pretty debt way right? of cash drive that and now, repurchase and that. we're continue things to ultimately it a do $XX at Board is of we really, on And flow $XX we that our maybe deploy do the get our growth Well, down new approved strategy feet we're right? to the begin like debt that the Brent to wet of to need to at we're

available acquisition where want that's you practical, not want it always want be available. you not So it, Because may when readily right? value it or and there's there's either M&A not readily always a it, something right, at you because the

is looking The frothy look far the markets in that still the markets, at. as multiples things other they're thing relatively when we're at still, as you the

drive will do into off to growth repurchases. play. is continue very are well to we to we accretive to our may shareholder sense we're any to makes value, we're if at able one to put things making do in that's trading doing that -- shareholders part that being doing we very which what are of of we absence the we're strategy, why and And that acquisition. So sure that an sensitive share And

anything with a find it's do us our or acquisition repayment. not makes puts to us that get position sense. out So whack that share in one credit debt of repurchases definitely we with an we when facility We're do going can't where

to going it. with pretty careful we're So be

Operator

with line of Our comes Ted the Jackson next question Northland Securities. from

Edward Jackson

your of Scott, first website. -- had quarter, go and sure to not question your on you an presentation. website, into back the I'm When is I for a ask presentation The I commentary, August on it's main want going your I see all, if actually there's

hasn't perhaps I updated, it am but been I wrong. think

Scott Montross

it will soon. updated be be think I it think I will Yes, updated.

that. about Sorry

Edward Jackson

Okay.

In guy. little I'm -- of no, a terms okay. mean, it's I

about to In backlog because nice a of. that pickup business a terms fronts. of the bit And of I benefit we're you of booked of activity margin some bidding in that 'XX. activity, questions, Scott, in the had X had if would, X is, on But for dearth bidding wanted pressure. talked you And in you've number more kind I your seeing margin mean, unpack little 'XX,

So back kind margin you is structure of from reference to maybe can talk you that. what impacting of your about see the

market? color on regional with the government set some mean, I the color I behind through based that -- of states some activity robust. your mean, my some in of Is to that? into can questions. 'XX roll side negative regards it first of it of this, fact kind of relatively drivers the be a to that then bidding the And How the around some funding That's terms matter but a that just play activity? then the of for result of thing bidding And the that's year? as out maybe maybe does backlog you the looks is coming is

Scott Montross

last to the all remember of one take Ted. I'm those, to because sure going first -- The I'm not

things And IIJA more are now. at we're we actually things we that of are we probably those down. up of go than coming our year. that's we at planning into what at a that really, when couple out in look that's projects we're the likely through think coming next come seeing don't a quite years. right our least things, as good funding a bit I These starts give project And the to the think tracking the to that just take things haircut pretty we to bid. funding, process that we've government XXXX. through obviously, system. saw hold that with bid, bit number everything strategic We're bigger is system, in the the bigger likely looking are And a part little come that may not a But

to really expect So good. kicking don't in But funding looks the IIJA that not really probably XXXX. -- start that's until I

look pretty XXXX still. that's -- couple is I exciting And and of said couple before, the a stuff small a This this I markets just margins had they're size market market great, we year. over this, coming Ted, markets the market ago So really not thing several really about were seeing size are we've I seen even -- years. this years still period. think ways really through. ugly. the back happened, that the small consolidation And through you that's really, before out with okay when coming last think of a this the of similar we're if margins this to while was a this And some

of the So that's have especially going looking forward, at that piece a excitement we markets. bigger

that. at is question, your part to about bit think some So look of things you'll I when how margins of a me you this of first and little your remind play and those have

saw lower people bidding to down get start what less you because up like backlog happening XXXX there's When and year we backlog. in bidding in go environments putting like we've this less ends and is seen their

of they're piece animals is and the to like, of starts meat, more it some hey, become all point. at So there after starving there right,

pressure months, last a A creates we've some of of things on So seen have bit. over backlog that the the margins. little margin. since that really down call, the few the probably stuff that some earnings we pressures has that And really lot of in good last kind

of earlier you that third have something margin talked lower you that in find the scrambling create some periods to I thing things little that. more put think that you're moved margin of XXXX, is not when we because of pressure good time a a quarter first into quarter and in to get that specific like of out absorption of there the the about moves out something of that as bit overhead have the may

double whammy a it's on margins. So your

when through a like decent get And really, and with market the a margin come there's able all with even go to quarter been for into that quarter whole that's steel have And bunch pipe third levels being the is that small them So we how that production really things halfway a being our for bodes pretty factors again, bigger. of in pressure just had well and this. to small, the anomalies starts exciting look that right?

so So -- your me other pieces the have okay, to you're and go remind question. of going to back

Edward Jackson

you of isn't like This to more listen, fair is it's activity, discussion more of smaller a lot into you're kind lot you're a is gotten so the -- bid of you've kind talking and it. project. question it that me projects Well, a this and big when just say take of isn't of about than a this if government to you're talking saying kind seeing what about. laid I you about and business haven't kind out of But had that's really have people that but projects, competing that you just that, of activity is a of when talk bread smaller And this is projects, mega -- of you're government a you the set for of big about fact lot smaller you're pieces these smaller business. not and that talking the aggressively butter 'XX

Scott Montross

are utility Yes. West municipality out are We're ones. get smaller some related. But still or Generally, big in there. pressure that as [ more seeing generally some don't are the as ] And ones the just projects ones. things XXXX. smaller seeing bigger much all on bigger There we're they

dynamics. it's say that would in government more into nationwide whether become form, larger the to the on those sponsored what are projects I but is are get say, there's some of or and But attractions. state what smaller funding attention all bidding attractions. So shape projects, those or The regional different kinds generally that ones Ted, more some extent, least at way, I'll goes federal more,

more -- the the a generally because how have region this, really they are sure. those want environment reasonable attract but attention that's bidding you say unless country slow, to more are projects, do for one So big smaller ones in I

Edward Jackson

and a put the then it the services you're I moving about and and 'XX of of into a business products end have infrastructure got and is level pretty funding. of together, all drive -- mean through you reading 'XX, feeling And it I'm I sounds the activity the 'XX. longer-term your guess in longer-term like and But lot good the with you've there's pickup a then tone 'XX current through for into demand

Scott Montross

Yes.

right. think that's I

year, that think bidding or Ted, XX% XXXX has XXXX. a maybe probably small like XXXX than XX% reality is a XXXX. is, was been I bigger year. more XXXX the bidding was

the okay smaller So expecting we've with in and we're we're 'XX, bidding probably and bigger business okay of a come years still like IIJA period things coming especially -- bidding of ones, during had we're time backlog funding, out that, time depending 'XX and could out. one your which X several tons on that bidding add year X frame year out, to thousand and way in coming these the how

as of I'd us. business we're we've So excited say coming pretty the how year. as this had with precast think headwinds with that amount we're the well the excited pressure about I things markets held going that the are that's about pipe But steel side up look at forward on equally

I think we signs both markets. the as for are stronger bode So and get well positive really back those business into

Edward Jackson

I'm great was and -- to to out the it's look very you you're that success your cash most you care that what just to fourth I'm going business, Okay. to year-to-date same you Well, at that I I with having mean I 'XX. I'm say, is end -- point if flow. I cash the at generation, But flow forward flow cash level the about, the and to free grow look going the free And were in seeing almost the in we'll continue happens and what see you're quarter. see

out get I'll of Now line.

Scott Montross

Thanks Ted.

Operator

concludes that comments. floor the to session. and Ladies Mr. question-and-answer back I'll Montross any turn gentlemen, final our for

Scott Montross

we've like Yes. pretty high everybody we the like for I'd say, pretty backlog for today. XXXX And just and quarters. obviously, to with us into to maintained again a thank high joining last came several I'd backlog, a

that pretty with XXXX. we're into think I going steady

remains the that strong. up XXXX, about unchanged. long-term precast I business. to pressure though highs transmission opportunities we're the we saw coming that significant off its pipe business our view business is And precast handle steel in in well even positioned water record And the think still remains

the near term that We business have, that our steel the growing are business. similar focused relative on business in pipe and to pressure growing size in we that

like And the again, And those you bit in bit this I the seen with disappointing had And but which, headwinds. this I in aren't is they're this than XXXX is disappointing, -- Steel before, that quite look ugly. size said biggest several markets a back or markets year pressure to year though that really think pipe thing, a in has market. generation markets a I this we've a the and were were years of is a configuration margin based ago and what through even well consolidation bit small reiterate, to really business current quarter the bodes that was market, margins represents we've resiliency a again, better to market past bigger little significantly and think more in the great, that on had of it size, markets. we've for the market due come little

I of also business lot there's still thing lot off that there, precast. for rates, it's it's the good headwinds And we're same and last headwinds. a has in highs of interest record a I a think mean pretty but along been bumping year's

to as we'll you So Is that appreciate we're these you, we it? markets, And expand thank time. everybody's and in -- forward continuing grow we'll talk really to guess and March. looking to I

Aaron Wilkins

March.

Scott Montross

you. thank So

Operator

you. This call. conference Thank today's concludes

participation. for lines your disconnect you may your Thank time. You this at

Northwest Pipe (NWPX) 3 Nov 232023 Q3 Earnings call transcript