NWPX - Earnings call 4 2023 | Northwest Pipe Company

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Operator

Greetings, and welcome to the Northwest Pipe Company Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Scott Montross, CEO. Thank you, sir.

You may begin.

Scott Montross

to Earnings Company's Conference welcome Full Quarter and XXXX Year Call. morning, Northwest Fourth Pipe and Good My name joined is President Wilkins, and Scott Chief Montross, and of our company, I the and Officer. I'm Financial today Aaron CEO by am the

you March it By yesterday, call to our was XXXX is Time. is This at replay. approximately being have earnings now, should access and release, available press for all which Eastern webcast, of X, issued X:XX p.m.

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

construction significant including negatively Thank outlook interest XXXX you business. of and in through detail. fairly I'd nonresidential financials as performance well the impacting like very rate year both our a Aaron precast XXXX market for a an today. small as demand our environment begin bidding our markets, steel some presented with to headwinds, and residential challenging XXXX, pressure then a in for pipe walk review and greater will business you joining that was that suppressed for all us

believe a we years growth by moving profitability that demonstrating several from continue resilience deploy through-cycle market only sales new XXXX levels last for the level levels have of forward. the and is conditions, we of challenging the $XXX.X modestly net solid, will that annual fairly we what remain strategy to deployed declined Despite record our driven million

to offset year had lower our project the $XXX.X of changes from from tons at due in was steel small XXXX. million, end segment produced sales fourth remained hot-rolled timing to in by pressure to X.X% the due increased from we of Annual the the XXXX, third bidding XXXX, in After partially highly revenue decline prices pricing end This quarter quarter. a a primarily higher year pricings resulting from XX% pipe of of and fairly steel volatile selling bands mix. strong relatively the

in by about end year-to-date XX% lead have However, confirmed and backlog, steel The pipe declined modestly XX, December was the million $XXX which million orders, September prices of declined fairly million at $XXX XX, XXXX. remain XX, times pressure and at from $XXX XXXX, XXXX, short. including December of as from

in elevated into we by year standards year account a had even relatively significantly small XXXX. anticipate stronger backlog historical Our bidding in the bidding when We XXXX. remains taking

to segment. declined the production shipping turning Now XXXX to changes from X.X% from impacting great a levels primarily our mix in line. raw did high, top to elevated and pricing helping of increased costs, offset our under-absorption. input construction led our environment volumes to by said, the at mitigated modestly Precast $XXX job in to million, teams our the That lower and revenue field to impact which interest precast keeping which the product rate current levels market, U.S. resulting due material

December down as and XX, Our from XX, December of year saw from XXXX, September the $XX at remained we levels XXXX, strong, XXXX. $XX $XX precast as order book of million last of million million related down totaling as fairly record XX, was which

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

XXX we sales residential in rising basis and of and moderately Precast XX.X% of commercial precast markets, interest from year in by in primarily The our product gross on reduced construction margin which rates XX.X% in the approximately production changes by Our points approximately declined XXXX, predominantly XXXX. to the XX of impact steel volume. changes absorption reducing of was record points pressure over due basis housing XXXX resulting overhead margin pipe decreased gross the mix. decline to pre-cash due experienced production demand, to

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

opportunities. Our focus attractive precast on strategy our priority remains product growing top strategic and the business through our M&A

that And $X.X Our precast of build state to ramping outside at Texas plants regions that, Level the worth in Texas-based Western X XXXX. approximately to up production. United product bid spread maximize $XX.X in our projects we in orders million Texas States. on of capacity booked worth effort of To utilization of has end, of mainly the million XXXX and out Southeastern we of in efficiencies of the been outside

previously are out precast project XX As to with and projects scheduled those come. operations serving Utah X We precast in geographic upon our Level expand produced in Utah at to Northwest XXXX, as the products primarily activity our Park the X once on production orders established comfortably are products of Park products to additional Utah in been the location for spread precast in currently we X more more before spread pipe precast locations. pilot discussed, plan Level expand to And locations. product we have produce product existing locations

acquisition the the ourselves position for growth, XXXX to we organic of highly in focused incurred remain order repaying on acquisitions. debt to ParkUSA further we finance Following

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

availability stockholders other borrowings under absence M&A possess In amended to and credit including repurchases value continuing of subject our that liquidity, share prospective flow via strong a our potential we asset opportunities are capital facility characteristics, return organic and opportunistic We of the our of margin growth and solid high-quality activity, profile. and cash meaningful efficiency evaluate compliance business. covenant to to needs may the positive

total we During $X.X have total million. repurchase XX, approximately cash XXX,XXX a February repurchased of to of enabled of And XX,XXX the fourth approximately as a generation shares total our a approximately strong of quarter, us shares at million. $X.X for

Before revenue the in I In outlook I'd anticipate first to XXXX. summarize like quarter SPP our of which margins our moderately we is and for business, very XXXX, conclude, positive. stronger

I'd we However, when in sequential downtime XXXX seasonally be expecting prior to are decline said, typical larger the a with severe our That a to conditions anticipate amount and transmission projects that that our at level in quarter upcoming compared due strength in and XXXX. by revenue to our we current of modest to weather bidding the backlog seeing to led add of year of various small unscheduled continued and the for XXXX. we like on in remain despite the line bidding fourth facilities. water we saw encouraged we're expect have that also margins SPP activity currently as we to have quarter, relatively

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

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

result, on to with prior to associated our a period the As market. mix and expect to quarter all rates slower that year with the construction precast lower product expected down revenue underabsorption well be we from first the the is production will of related margins associated be modestly interest due depressed changes as the impact levels as market, to in continue

XXXX be a However, this for issue precast. we as to a we near-term expect only strong are projecting

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

finished relatively volatility for maintaining the see competitive SPP small as we've to our summary, edge XXXX well and the with in year the to in year and business only steel considering a both prices, shorter the interest Nevertheless, significant to our gross organic with potential cash strong cycle. In diversify profit which growth through the we the testament was precast modest we built topline our as market the year, the is into and and conversion strong a rising a margins business environment. space investments the challenging bidding declines resiliency SPP rate provide

remains SPP grow business. for as business Our precast goal our similar our a to to related size

that recordable pleased recordable rate best X.X, Northwest at year Pipe. below seen achieving we I'm rate well incident to total achieved lowest XXXX, the addition, extremely Collectively, ever. in incident plants In were ever at the for report average our XX safety our national

safety at culture of our our organization. of which of level the every is core accountability at Our culture, is infused

continued and all teamwork sets ensures and the the for commitment foundation our of execution to strategy your and operating performance, our stable our Our against of you strong manufacturing environment Northwest performance for safely. for wellbeing Pipe Thank and team at growth employees. the

of company; the our efficiencies continuing cost remain: I will five, our detail. where persistently the Looking finally, a turn repurchases. absence grow and continuing volume; at company; are three, our focused walk shareholders employees on greater over implement margin workplace financials to two, and safe to identify to to M&A reductions proud value levels priorities opportunities, number opportunities all maintaining of through the to to share through returning ahead, work; over strategic in opportunistic in Aaron one, call four, to the now

Aaron Wilkins

morning, good and Scott, everyone. you, Thank

sentiments on begin I I safety echo Scott's today, this to year. Before the would accomplishment. entire like surrounding the company to Congratulations company's record

our diluted or of per an fourth share quarter to $X.X or the compared million per million Consolidated quarter XXXX. fourth for to was $X.XX moving profitability. Now $X income net diluted overview in the share of $X.XX

compared to income was $X.XX $XX.X or in or diluted $X.XX $XX.X For share the share full net million year, diluted million XXXX. per consolidated per

the Our million Both expectations surpassed X.X% for year fourth sales compared $XXX.X quarter fourth our ago to million in $XXX.X business consolidated quarter. segments the increased to quarter. revenue net

increased a driven pressure changes timing fourth segment in $XX.X product primarily XX% million increased resulting X% selling to to compared $XX.X in in segment primarily produced, quarter in to $XX.X XX% selling increase a of quarter tons quarter price well was decrease due to ton, increase a X% fourth per demand. primarily the quarter million Precast XXXX. in fourth due mix product product a sales the in sales partially changes prices, the of mix. shift was lower This Steel for XXXX. in This million X.X% project in addition offset to due X.X% $XX.X result to by in the million volume as pipe to to from was in mix, increase a by as which compared in

of as case products do precast in in prices the of always highly reminder, production between case volumes periods As the for steel mix comparable and sales of volumes nature we the not dependent our and the metrics corresponding shipment the products. composition due pressure are both of the the a provide they pipe manufacture, of to segments unique on

sales of to fourth the in segment profit $XX.X in XXXX, $XX to pipe of in XX.X% quarter XX.X% gross For the of of the XX.X% fourth sales quarter product gross profit fourth profit Steel or quarter, compared changes $XX.X segment of gross of in million to the to decreased sales X.X% million $XX.X XXXX. due XX.X% sales quarter to million XX.X% or pressure consolidated compared or million decreased mix. of primarily or

Precast the gross segment also seen resulted The million from construction sales in in the or in brought of $X.X lower commercial pressures which lower been profit to quarter million downward quarter to or sales XX.X% on due the absorption. pricing demand, has of in XXXX pressure concentrated fourth decreased we've precast $X.X of markets. XX.X% XX.X% by cost

precast that current new mortgage environment headwinds the starts. housing have ongoing the despite markets Our remained strong implications and with residential relatively on macroeconomic poses rate

fourth including to million $XX.X of $XX.X and fees. compared incentive by million general of The system X% $X.X driven was of decreased million offset quarter XXXX compensation quarter to X.X% by or the administrative XX.X% decrease sales. expense, for higher primarily $X partially in million implementation services, a lower in Selling, sales the professional expenses in or

in year, of million general the to of For or coupled increased in largely full X% consolidated our and XXXX. to with due net increase compared expenses implementation higher expense million or to was SG&A pressures. professional fees sales administrative The X.X% system inflationary X.X% sales costs, and selling, $XX.X $XX broader

expenses we of consolidated administrative to to in general million. million estimate our selling, For the the and year full range $XX be $XX XXXX,

quarter fourth quarter. compared the million year XXXX Depreciation ago to $X and million in the amortization in was of expense $X.X

company-wide year, full the amortization million $XX.X expense $XX.X million in For XXXX. compared depreciation and was to

the and pipe Given the to our modestly and in pipe commissioning reinforced I new year concrete larger increase expected expect the of amortization depreciation XXXX. business, bidding for steel pressure plant, currently planned

full year, $X.X noncash fourth of XXXX, And expense XXXX. and million quarter was was relatively XXXX incentive million were expenses respectively. in flat Our the compensation-related with $X.X which million, and the for compensation noncash $X.X

decrease the full interest XXXX. expect expense than increase $X For in We million expense million full to compared rates, the $X average XXXX offset and to year the million due XXXX. interest year, seen million to increased for in in $X.X between more interest which currently borrowings $X.X in daily

tax an tax to of income million tax Our in compared in resulting million effective of XXXX $X.X income $XX.X expense rate income XX% an effective rate was XX.X%. XXXX or

than income to tax state effective came differences. positions, accrued tax due nondeductible Our tax interest permanent income anticipated in higher rates uncertain on and

We expect rate to our range the XXXX be should XX% XX%. tax for within of

condition. to XXXX. Now financial flows our We I will in transition strong generated cash

net For provided operating compared was used quarter activities the by cash activities million net of the of $X $X operating cash in quarter, in XXXX. million to fourth

offset to by we operating cash compared of activities in $XX.X of activities operating changes net to which primarily generated profitability. in by For provided the favorable by $XX.X provided capital full cash lower million working XXXX, million partially due year, was net

ago million were $XX million year compared expenditures the for to $X capital quarter in the quarter. Our fourth

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

million As XXXX. a full our to year free of cash $X.X $XX.X in million flow negative compared totaled cash free flow result,

anticipate range we free forward, $XX million. full million between and cash $XX flow Looking year to XXXX

our we pressure we year, some key XXXX every reverse as the the pressure management our Consistent XXXX. expect the needs of that steel plan the generation flow believe of in by evidenced applicable our working strategic on of compensation will team. cash a remains capital half of to first focus goal business business within member the and in new While for our incentive half second addition of pipe

Collectively, shareholder to of is critical flow growth view return we our cash free the execution and strategies.

repurchases paid $XX.XX repurchases, completed which $X.X As plan we were Scott the in average date in all million and share. occurring was million highlighted to share of price $X.X through XXXX, under which XXXX. The February of executed trading a of per XXbX-X repurchase

credit As of on XXXX, capacity our facility, borrowings year-end $XX.X outstanding million line. of as our on December from in million had $XX.X of borrowing $XX approximately XX, XXXX, million we credit down leaving additional

In summary, achieved financial year our XXXX us well the am and environment, in sentiment a challenging I'd proud positioning like to Scott's performance I operating that for of echo ahead.

our MRP material that are weakness to like us, pilot that very important objective. the We pleased to behind remediation would and employees made project seek segment thank and to accomplish our have was the market I possible it business optimize to implementation performance systems XXXX and we another continue important project accomplishment and operating The thereby will share opportunities automate forward. to precast moving

I employees express into would encourage continued also and take opportunity to XXXX. to in safety like to achievement my their sincere their gratitude for workplace XXXX this our commitment in

the the for I Pipe. Northwest begin I Finally, continued now like support will operator to confidence their it thank to in shareholders our would to over turn question-and-answer and session.

Operator

Instructions] [Operator

Davidson. question first Brent D.A. Our comes Thielman from with

Brent Thielman

today? you about loaded the kind half Yes, we context in of or just just the potentially see expanding? more front this versus than in as first 'XX it 'XX uptick more half there as or question, back Scott, is think And backlog any bidding bidding tonnes maybe that is

Scott Montross

Brent, back the to good which Yes. is Like part bid pretty year pretty that expect a XXXX upfront between in year, and year and for obviously And somewhere just is XXXX portion in the XX% we're small the part in for bidding the significant year of higher, is we the levels. a of said, amount year. production that tons during of was that we the of XX% seeing

ways to I shape happy how we're pretty year. is bidding mean about starting So this this up

Brent Thielman

then plus there. with margins Scott, gross in depressed you the market the that been is the that you of of now? conditions? about margins I just given XX% still remain mentioned sort for sustainable should the guess, precast precast And And then generating think Great. the you've you just can Okay. conditions you crosscurrents could right margins see business some better talk where market under be

Scott Montross

Yes.

of an in We to significant give just which a what year, about. in the year. year in almost down being been is pretty the of quarter quarter -- the which the like giving talking steel some business of first precast every weather obviously, events pressure little I And first is think why of had kind there's the we're bit things in bit about bit. a about We've our little example, guidance about trend our plant days and business. X the pipe we're little of down a same other

more we the margins So being a to of really expand at the when quarter, looking past you're about compressed, bit the get near-term those talking we're as of little a and thing, first start year. believing it's business, first and precast bit in a we're margins little quarter the

into Especially back relatively pick there's is in right? like The the is that we're as And And expectation the we the interest Index, seeing a construction the is year flat what really market, looks of it are lot from get like a planning of the to ease. is little activity that right go if half they a with in bit it's into the since Momentum of stage going construction in rates and the queue. obviously, But the lot belief stuff of the to there's back market that ground queue those for with listen as projects you the Dodge projects up. as stage we get there's the are to breaking muted. year to now, start to the the start half into going planning

of product your margins, you're depending are relatively normal -- Brent, XX%, that looking that see what we're mix. are If seeing between ongoing going probably you're probably year, in on XX% XX% when a business, there a what for we an are think forward, at looking XX%, you in tremendous saw demand, probably years margins margins overall maybe XX%, think and I could on at amount with which I precast XXXX basis. like the

the depends the everything product is really side. the And up interestingly what enough, the not precast the what on the out on on Park the actually really on piece. And I specifically what expect So the market seeing interest it the construction say, mix stages and is of with way again, which in we start that's coming of the that going We're more to off we is see Geneva Geneva up the looks be in of on most hits to residential, kind hit impact to commercial all nonresidential happy margin with backlog the Brent, really, on the anyway. would would bit a like. year but performance just think of well holding side, planning margin by how come we're is the rates. middle back really, holding pretty being for the you well. side, But market, But little being

So good it think looks forward. I pretty going

Brent Thielman

Maybe of financials. looking to pretty the is just position clear accelerate Excellent. strategy? about some Because I But on that. It's precast that the I'm a the dividends to talk the company one. wondering paying mean you've the last to in M&A done things strategy Could here. if you maybe do is or accelerate just potentially

Scott Montross

accessible? right? Brent, compared accessibility is M&A are like a M&A that we've comes things at -- are out this one think We've year So seen market XXXX. a challenging in looking practical, really -- down market, bit to it there it's it run the the the little in you into I to what in for Is year of of a is that things it and there?

owns in at, the a hurry generation EBITDA isn't businesses their So maybe aren't it or businesses whoever what own was. people maybe big the looking such we're because that that

get to back higher-level period. waiting they're to So

right? practice -- is, the mean, of sensitive -- pretty piece it, what the we're other The at. for is I us, we're cognizant and what to is If practicality trading

XXx, things seeing that Xx, of we're little a trading that XXx, a are out if there So are multiples at that's deterrent. bit at

constantly point. seeing this actually are and at at things looking we the now, we're time So -- right more we all things are

things. we're the So one looking the things I profile, that's strong to ones. right accretive back the to any those for. and look Good fits finding people flow know, and to one And going or think looking we're X those at time, into that all we be performance, just get at cash margin are constantly business [indiscernible]you probably different starting just additive looking X that profile for the but market.

fast So we we're it as just accelerating as can.

takes a it while. sometimes So

Brent Thielman

No, get that, Yes. I Scott.

the forward? was around going asking? I the of just more question mean, [indiscernible](XX:XX) what a there -- building of think obviously, internally, sort of my you people depending and base are out folks are what's on I integration that deals

Scott Montross

Yes.

people company everything due the nail integration. on hit what these of running were in the the we've acquisitions internally what doing kind the in the is up because head day-to-day talking You acquisitions, same and diligence past with ended of been for are on and we've involved about the the that the

it factor to So be starts little burnout with bit a kind a of people internally.

So to we've here that is up in. a what company actually add an with when business first But like it, the a able ongoing. when weeks then is starting just taking those can have call we're running people that one time people SWOT in just started not we we pieces be have to of acquisition, the things bit working almost acquisition little day-to-day. pieces normal team, of we'll next that couple the we've done in the on bringing we'll of we're are that be And the the of and to the to

of things little able calling now, Brent. bit we're to a we're right to -- a be in little So of SWOT a bringing these bit team a handle

Operator

Our next & Julio question with Co. from Sidoti comes Romero

Julio Romero

I said company? that hear correctly material is you you behind weakness the did remediation the Aaron,

Aaron Wilkins

work are was external lot to associated. was us. I complement have also us behind involved, that members material priority obviously lot was to the that year functional to of involved. were for -- team the weakness a enough. of That A to is a project correct. the We teams done work obviously, great point to It team out able that of lot get the

functions, function well externally process. all audit as audit the We external our as very [indiscernible] have were an internal in procured

Julio Romero

that And the you that a guys. get you I a undertaking of do big Excellent. terms to to for Congrats know in audit? then expect XX-K was you. clean reflected on

Aaron Wilkins

Yes.

see [indiscernible] in -- afternoon, reflective of be material K we that opinion today You'll the no that filed reflected the this to weakness,

Julio Romero

Can We've great some contractor talk That's is on I impacting news. to and guess peers also mentioned Excellent. you've think and industry as delays fourth the comment well. I heard about guys of value delays quarter? the precast. seen Great in some just if which you to same terms in pressure the hear. where side, to the turning chain impact the you your contractor particularly commercial on any segment way to quantify precast

Scott Montross

What Park absorption and early just is of commercial the bit as just result, first by the in a into so not impacted overhead the margins. mostly are seeing for that business the impacting side was as side commercial impact. because fourth bit a and the good, quarter [indiscernible] rate is the Park little on amount we us, being the more because and maybe And side, on interest down it's quarter the production is of more the

thing. that seeing that and that the and production there. just levels margins for is. much expecting that down they through as It's the impacting biggest We're at ones we production seeing what impact the the builders not and seen happens delays now to mostly of rates mostly commercial Geneva. really quite I waiting we and as surprisingly on Geneva some been think the with biggest were has impact right the this we've owners frankly, and is So residential underabsorption for were haven't biggest from slowing that the And what quite based impact lower this gone levels impact side, interest business see see on commercial been is at seeing. would the we're point. That's side Park to at the strong we we're mostly it the Park, Park --

Julio Romero

maybe later overall if then know rates it weather, interest the you about to in you delays talked expecting could speak segment, year. XQ down be Got particularly come for kind precast a the to down, That's year you. relates customer segment. but helpful. strong to And expecting across I expect of sentiment maybe contractor you to as the

Scott Montross

Yes.

lot waiting order because those it's is seeing right? And is a ultimately, precast have order pretty happening. side, it the but a the at again, book going the customers we're looks. on to we there's to with that's with side to say vote think of people obviously, what not grow Park get do me, order see book is how their book, with the I the lot settlement -- again. starting And to -- what's a And Geneva would I look only to order start the good grow to

we up. specifically, strong talks a market lot get we're to like the So listen I stages that bit commercial really setting And stages back of breaking they're into year, what residential or these said half lot projects stuff Dodge planning the and the as the of for stuff, momentum construction into or the the the half on starts, I board to up ground year. get if on expectation that or to second of they're construction starting XXXX think to the going index that's by whether a then from from customers are that pick are starts go the side. this the the right across we're think you expecting about, really time on we now the of a little they're a And in into really stages, the institutional planning the the earlier,

'XX strength half it's we're what a think strong going very at. back is looking I XXXX So into in

Operator

Investment [Operator Instructions] Our Wright next Henry question Trust. comes from David with

David Wright

the And good. safety deck new you that good results. Congratulations on posted it's also the pretty yesterday,

that. for congratulations So

Scott Montross

you. Thank

David Wright

as Water market your Is update. of where the program whole a deck? Texas. deck, of in kind past, of just this I just Scott, stuff years ask, you only Houston that's At wanted a on end project, your sort of in lot the job generally had Texas you list project Surface to list listed including the opportunities started the And of the condensed in larger

Scott Montross

major to XXX to Project, are relatively X,XXX of programs, vast -- XX,XXX anywhere of just from We to bid be the XX,XXX the can to that get a through. of they so ones on idea hundred that on XX,XXX depending projects be Water River tons. from And really the we tons are the there. we're the David, Yes. an tons that stuff projects list we ones guys majority Valley could coming Like show that's Red But people that are the calling couple ones are Supply that big on this always -- it's that anywhere out project. you

And when about of in guys this Well, be XX about we each hear right? can could like in fittings you talking pipe this segment. got projects, talk segments, things that, about too, segment, segments. but and X,XXX in these segment there you hear be tons and Well, us us them

the ones. smaller that know smaller projects sized we and much I'm bidding every decent and You saying, really we log bid projects meeting projects. so out versus just are over probably, we're on, Tuesday the do what vast call a XX:X big The projects morning majority go

out So that there's a those There's lot really bidding projects. a on on, goes there. of of lot small

David Wright

that clarification. for Thanks

and to into is -- stated on buyback, the $XX stock the executing you're For that And everyday, below is seems Aaron, cares care. book it's putting money the This great. good company nobody the value that's stock the it. that

that about other absent to capital the a so XX,XXX be year, the January needs? kind XXX,XXX kind So of balance I In the Is would a and February, month. any great. think of shares, total over unexpected look that bought you that's for shares of of cadence

Aaron Wilkins

of to Yes. that of our XXbX-X I total have and point Board David, rate For would with we Directors capital our about we us allocation that takes in up Gap] which that and we you've think to February. $XX [Audio [Audio that at have plan But trading M&A. what million would up Gap] think reconsider January a seen transactions say the

David Wright

Okay.

this flow going my get I $XX your that you if XXXX? did You're to cash there. million and mentioned, then know speaker. out And right microphone in is projected in or million that's I don't $XX free

Aaron Wilkins

correct. that's Yes,

David Wright

the for executive as plan as been has that incentive one new the And added of compensation a -- everyone? for

Aaron Wilkins

It's and skin worked week we the at, has would to focused Scott we his correct. have and on when flow we have new cash at that a goal short-term cash to a wants with Yes, a better flow bit get more where team every it be but look something little the incentive look senior plan that devise in that's not drive he also and single all can results we for game place actually to generation. company.[indiscernible]

David Wright

Right. of be is component kind emphasis say, plan equity increased the years repurchase? generally the compensation of And with over, consistent share on executive prior an to

Aaron Wilkins

correctly, David, question total, guess, I the goal. I if piece senior just change no understand specific has to one there's this to employees. team to I of think bonus in been It's devoted offered that our your element cash

that's has would As want functional goals, past, years it devoted leadership I goals have kind objective." divided in have uniform been said, by us one -- all departmental or those be but "Hey, for to aligned to Scott a of three of and

Scott Montross

process the business for to of So the the that think valuation important we what is cash pressure because that going is business thing it's cash where pipe up to things forward steel of material not from ongoing adding of as paid becomes the on I [indiscernible] price in the business the And it's doing and then so anything. thought contract getting hand our enough pressure comes like component the everything for prepayments flow business that. tie mining what on better a pipe focus me to cash flow receivables the affecting valuation Yes, is share right? the and as really, company, the having seen possible cash is low because steel much very it's with an of and basis on lot from to and the assets of to than we've flow steel that

valuation find of company. mine steel So think if the to out to better I business, a of just the way generate of dollars which pressure to those pipe more we're flows, to the help going we continue can cash

David Wright

Okay. how equity kind of deep question, base the Last employee participation into go? does

Scott Montross

higher level general like next doesn't director all structure. way into It and management down business. that. level level senior in like senior management the into of management goes It people past down into the the the Generally, go down the the

David Wright

Yes.

be Or so options? stock And that would that be would shares?

Scott Montross

it's No. equities shares. looking at piece, When the you're

larger performance is XX% up EBITDA our which on make shares, restricted generation a makes Restricted percentage have the then total a EBITDA shares and We up piece, of and and small shares piece. which performance is shares, based rest. generation the

David Wright

Okay. Great to down goes XXXX. of that that it for level and best luck

Scott Montross

David. Thanks,

Operator

time. further comments. over would like now no questions are There to back closing for Scott this the to I at call turn

Scott Montross

this we've us we good obviously, pipe joining like really we through we here far the bidding not pressure headwinds, to headwinds, a rates press a on different cycles had And in business. of steel the with even some as today. heading XXXX of pretty said environment ups the with coming into a and think with think and appreciate level small gotten business through and we're and And where precast everybody And So interest and in these we've period release, those resiliency beyond. kind downs. we're the pressure

precast we're to the just for the obviously, business add looking shareholders. to grow on the value forward more So continuing side. And continuing to

everything we to and let's listen see do with that guys appreciate and things these how So us, going. you just

Operator

teleconference. today's concludes This

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

Northwest Pipe (NWPX) 5 Mar 242023 Q4 Earnings call transcript