NWPX - Earnings call transcript Q2 2024

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Scott Montross

Good morning, and welcome to Northwest Pipe Company's Second Quarter 2024 Earnings Conference Call. My name is Scott Montross, and I'm President and CEO of the company. I'm joined today by Aaron Wilkins, our Chief Financial Officer.

By now, all of you should have access to our earnings press release, which was issued yesterday, July 31, 2024, at approximately 4:00 p.m. Eastern Time. webcast, is being for is call and available it replay. This

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

you Thank of our through Steel in led the greater performance joining quarter and in begin I'll outlook second and residential by side detail. We for growth business. delivered our with financials strong Precast will today. quarter you a all XXXX. results, Pressure of walk second for review business our Aaron our Pipe us then

XX.X% to million, Our consolidated since have year-over-year XXXX. $XXX.X quarterly net the level early seen we increased sales strongest

our million, improved. XX.X% significantly and our capital strong segment the profitability drive quarterly helped the And flow reported working revenue with $XX.X of our the during management, results, from further level in totaled cash break revenue when segment an quarter. To down increase effective coupled SPP Our highest year-over-year history.

opportunities project Our production bidding due saw were we which timing, in of the performance reflective the higher strong first changes year. reflected of that primarily to half in the pipeline levels of

wins while strong record same second and and SPP generating free executing new securing excellent number on the job team revenue cash bids quarter do project projects, has backlog, a time, at flow. an our Our and of improving the to continued in

XXXX. of orders confirmed XX, XX, was of million March $XXX including XXXX, as million $XXX million, backlog, at XX up June and an $XXX improvement from from SPP June Our as

the steadily at production Steel in Our partially selling the prices the second stand to realized prices in offset about but declined stabilizing course range. appear ton weeks. second and of a to was X X lower the throughout be due are mix quarter, quarter bottom reaching performance times $XXX Lead the quarter. by to

our turning further residential revenue $XX increased at order of improvement due Geneva, our our to to on primarily million, X.X% segment. strength by year-over-year to continued to Now shipment side strong and in which Precast and levels Precast the book. business production resulted

experienced However, due shipping reduced $X.X significant strength, led disruptions Park related at negative our estimate the nonresidential the shipments on quarter. this events Texas in These at we quarter. had severe the of construction we much X in to our primarily facilities, million business an production, of to portion throughout all various Precast our approximate events sales Precast weather during offset on and Park impact order intake which

current environment side our persistent interest In create business. the rate continues to of addition, headwinds on the commercial nonresidential

pricing the quarter increases. saw Precast side, both dynamics the On price following the nonresidential implementation multiple and the second better businesses of in pricing residential

XXXX, and As to book of million of $XX XXXX. XX, $XX from as improved June million of million order March as our XX, June $XX XX,

second resulting company, XX.X% quarter for record XX.X%, the up in to gross profit of gross consolidated gross from increased quarter the new consolidated profit year-over-year second Our a million, the XXXX. of for margins $XX.X XX.X% in

activity. second points as as to in basis in we our points due primarily well was quarter the prior XXX period of saw overhead XX% gross over SPP strong, strength production by volume, and over year the margin mix basis and changes significant prior product absorption increasing which that Our approximately XXX bidding higher the improved quarter,

days, impacts XX.X% in absorption. down which on compared reduced the primarily XXXX, as and second of of overhead margin XX.X% in Our of the weather-related a revenue resulted shipping and at result quarter the facilities was Park Precast our to severe reduced gross the our quarter second production

at the the versus construction However, on residential margins side year Geneva ago the strengthened period.

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

on organic future the M&A strategic precast business a growing strategy focus combination and spread of through product Our opportunities. remains primary

continued worth projects Once additional Beginning X utilization by Park the at more with Park product are of the we plan to locations, have our efficiencies pending. spread, the Texas. In capacity X to precast traction the at outside produce on to of X strategy have at Park locations on despite at volume. million of more of approximately currently of out completed weather-related spread $XX Year-to-date, additional projects, $X an to maximize we headwinds geographic our plants, production worth and overall has products with comfortably XX on continued expand and our outside we Northwest progress product X year-to-date years. Utah building are regard Pipe existing by Level next million in on bidding projects production Level this of Texas-based production booking plants make Texas projects, our products to strategy, couple XX solid to orders of at precast Level established Geneva, we over and

to attractive production us space and would and encountered positioned actively M&A are our debt near-term growth, expansion opportunities XXXX current very well the headwinds to increase high Precast-related capabilities continues the our related rate the space we manufacturing the that related our further finance evaluating working the maximize pursue the list organic of financing regard we to growth geographic as portfolio, from reach. The be we that acquisition growth are the current resulting help interest we've strategy, as precast and despite well ensure to various of of incurred environment. SPP expand opportunities. In on product for precast efficiencies in capital an area Following to of priorities repaying ParkUSA business remains our

flow consistent previously we businesses our possess margins looking cash generation. for accretive As enhanced high-quality, well-run and positive are potential that a are noted, growth, earnings to that for strong organic and

of opportunities. to M&A accretive opportunistic opt we may to our shares we continue stock Next, in evaluate repurchasing while be common

quarter, authorization repurchase share of second a XX,XXX shares July approximately shares in $X.X XXXX, of since for as November stock $X.X we of a our back the of repurchased total of of XX. total our common we the for XXX,XXX bought million. And During million initial

Before of I'd gross Steel to mix we be to third in quarter production have to volume. XXXX. In and to for summarize primarily from line projects we we that overall of I delivered, modestly conclude, booked margins and our Pipe on quarter related both a impact our outlook revenue the record business, Pressure the just like second anticipate our relatively down their

upcoming of of the XXXX that remain in of our expect website. water by the seeing currently projects, amount in be we half found first our detailed current transmission on expected larger We are high encouraged standards, to expected historical the investor by second and bidding which remain the also Relations our presentation SPP be on is half. We slightly can backlog to of the given portion volume activity Investor than

we a with of strong In in our third Precast business, and improvements both following year. positioning quarter the margins, us revenue a are slow half second of expecting a first the stronger year, half for

residential long amount challenges of U.S. the strength of summary, market despite the results, believe the X the are our quarterly pent-up specifically housing, encountered. various our pleased need We for Precast records a we and to mid very the the in in infrastructure given significant position. In new we growing which for term with business growing of spending attainment the continue demand, in to reflect

environment continues the the by of significantly performance that to bidding balance a remain supported Our throughout is year. be to stronger in anticipated XXXX elevated

in our everything to in execution my gratitude teams their express I'd they like that to do. strong continued field prioritizing for for safety the and

continue to out the diversification began helps cycle transactional businesses results creates the during overall periods of entry SPP faster space. business, and especially SPP be strategy Precast cash our are Additionally, XXXX by more in comparison bolstered our to nature, conversion market. the business, with deploying In precast the our variability the in balance into which we an in

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

Aaron Wilkins

you, I'll and morning, Scott, begin profitability. our Thank quarter second everyone. good with overview of an

$XXX.X the $XX.X million sales increased $XX.X million the to second or Consolidated per $X.XX segment Pressure ago $X.XX increased share, million net Pipe net in to million year in the share $X.X XXXX. $XXX.X income record to in diluted million million a was of XX.X% quarter to Consolidated quarter quarter. Steel XXXX. compared to for the second of compared XX.X% compared $X.X quarter per sales or second diluted

SPP from improved offset highlighted, coupled our in sales in XXXX exceeded shipped, costs, to compared offset primarily with XX% to selling changes sales material in a of stemming XX% lower XX% market changes timing, decrease $XX mix. $XX.X and second expectations, in by from increase X.X% a prices partially million ton, in project in raw XX% resulting by demand increase selling As partially which tons was a per price primarily driven due produced, Scott to by changes million product due segment volume mix. Precast increased to in decrease product a the in quarter

demand, higher interest shipment while the in of second Park volumes as as business due continued headwinds result was a on business from delays. Our Texas to our commercial as rate Geneva environment in well quarter strong weather to slower in construction market the benefit the

case always sales to a or between pressure XXXX. metrics segment's gross volumes the volumes periods case corresponding product not of in XX.X% of $XX.X million of mix. Consolidated As and composition each are for provide increased segments both of prices shipment therefore, in are of products the dependent million of highly the manufacture average sales reminder, to comparable the do in pipe precast, they second we steel $XX.X XX.X% quarter on compared unique, the profit as sales or XX.X% the production

a the $XX second profit sales in in profit increased was $X.X shipment to expenses in sales mix. gross million profit segment the XXXX, XXXX Our margin second incentive primarily compared second due continued $XX.X Pipe compared due gross to in quarter compression or quarter of company. Steel particularly or to segment continued to sales infrastructure segment sales segment and of higher Precast gross decreased record commercial profit product sales to changes headwinds million XXXX, XX% or or XX.X% million changes administrative quarter delays in the or strengthening XX.X% to we to of for saw residential gross coupled with million the infrastructure consolidated volume XX.X% due the of of of or Pressure of of the million XX.X% product at mix. Precast in Despite second and represented from during increase Park. Selling, of $X.X markets, XX.X% quarter quarter sales. primarily Precast increased due primarily X.X% demand, $XX in Utah, of X.X% second $XX.X higher million expense. to general The compensation to for the XX.X%

in was $X.X quarter second ago Our quarter. of the noncash in expense the compensation XXXX year compared million million to incentive $X.X

For range to consolidated the million in the $X.X $XX of and year selling, expect full in $XX compared be to quarter. general our ago now administrative $X.X the year quarter XXXX, was in and the million of of amortization we second expense approximately million. Depreciation million expenses XXXX to

in $X.X and million be primarily in a average to borrowings the million $XX expense and for second between increase higher from full lesser year XXXX. Interest depreciation a rate. average XXXX, million the expect interest expense amortization $XX to extent, quarter daily of to $X.X and, due to increased million the We

approximately year $X full be of expect interest million. we XXXX, the expense For to

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

the second impacted nondeductible and quarters differences. were XXXX for XXXX permanent rate of tax Our by

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

our and capital working and to provided in due to $X.X of quarter million cash primarily shareholders. to was execution by a remains strategy to flow operating is value of second growth million in condition. to second our business our cash in the XXXX will of changes as XXXX, greater our activities compared the key quarter higher profitability. Enhanced generation of financial $XX.X transition delivering Net it I focus Now critical the

early more year, anticipated the had quarter. for Steel first capital for attributable the capital levels during position was the we build contract less increase the half the ability SPP Pressure Pipe This than to production in business than higher-than-anticipated working projects. large expected While an XX June liabilities of working stemming pressures our achieved offset to certain actual from in at the

improve flows the expect million year to the second free for in the $XX flow year, XXXX. cash and continue to full our with half range $XX anticipated cash between million of to We

City million new Salt concrete Our compared Lake prior quarter. capital second expenditures of improve of the to we totaled $X million after quarter efficiencies months, in and is in in pipe which, year XXXX produce the completion and that facility. next concrete $X.X on of commissioning, We sell the pipe to the successful manholes the X project and yields out production in expected anticipate reinforced

to We of full continue $XX XXXX. $XX total to year range be in million million CapEx for the anticipate our to the

line. In our credit and flows, we leaving with June on record focus, of performance, million million to are we all overall additional are quarterly improved testament outstanding capacity our credit profit pleased extremely dedication team's gross in our on our borrowings execution. our financial approximately which XXXX, and facility, including cash $XX $XX.X and As XX, had a summary, of borrowing

ability is evident us our market Our strategic of the to this well positioned and adapt beyond. in through balance for and continued to future financial and success have year growth conditions our initiatives achievements,

all now begin to commitment support Company. I continued employees turn the to confidence to continued safety execution will Pipe exemplary over as shareholders question-and-answer Northwest their and it in to their for for to of well the as and you session. operator Thank our our

Operator

[Operator Instructions] our Sidoti. question first from Julio from today comes And Romero

Julio Romero

pressure half. second of kind you better be And that, strength we expected expect itself? then maybe segment pipe that Steel to half Gap] Environment Can to slightly talk first [Audio to long for can sustain the confidence fuel than Pipe Pressure how your be the for sustained? is that can strength secondly,

Scott Montross

But of Julio, and of larger at obviously, mean, part cut on I the we if year, kind of bid question. this we've it's first looked you the these half the what's question missed the as and in bidding half, year. of I the your we to slightly at know first know were what's out half things, in second beginning. this the second than don't

bunch So be pressure and the to just starting to bit trickle there's pipe IIJA steel of very a some to late funding money it. And obviously, mass to of continues XXXX we're these start a we of Eastern Mexico IIJA New funding got like expect on until Rural don't the that's see start now Water or the strong. in things. hit really project a to the And market 'XX. Like IIJA really bolster District the little

So in us this is period front of we're quite a pressure of strength steel that the side. in seeing pipe

because to missed I'm you another pause part second to and said. ask going first you of you I'm So what going for there let -- question we let a the

Julio Romero

are be it I'm Yes. And out. better. question cutting just like sounds of really to for kind I'm steel it's that. half it and term, XXXX from like sorry in I'm it's expected pressure Because place. trying like My know, about sounds if just on about like a was of second segment sorry in past, I'm the in the volatile just from and a is medium I it, focused, 'XX profit certainly you hit a SPP. long-term to think sustainability been IIJA standpoint. the drivers

us think help sustainability of this like medium-term Just the segment. about

Scott Montross

we to year level. and I in with were And you a amount significant margin generate business business. still Steel the Pipe gross was at turned about out, bidding this seen the look even term things that's longer And is decent was even XXXX a wise of and of a relatively, there One the guess, in now production-wise profitability XXXX able level that Pressure different we've how consolidation business. halfway when small that,

starting over not a one see as two, what has so larger Well, because pipe: every in the we're on results on big you're XXXX. great. that market that's XX% seeing a bidding is And that's overhead more to of bidding there's pressure the market absorption; job much pressure steel

allows margins continue also it in to midterm. up. So don't we that to to the change expect And pricing elevate the and

kind with years, IIJA expect up a glide to push that the into where the we starts We time to frame the rate the funding few and go have XXXX really in way business. of last the backlog, strong demand into

and we concerned in really in pipe. But market. 'XX when steel even that's XXXX, business, were with as pressure any in even when not that, consolidation fluctuations at major point 'XX X we're in markets in the saw with the So nearly the still this of small there have had violent happened we we volatile what XXXX, players it's like as back not

a the level. players there's market it's to and decent consolidated in major Now X down

longer changed So I landscape the that's of the kind think Julio. probably for term,

Julio Romero

appreciate context could. Last there. one, the you providing if I guys Understood. I

that due get believe. realized You think in the on sales called to Does Is side that negative how the $X.X XQ? incremental? we million out I precast from Just that? impact, that weather impact should about

Scott Montross

see going you're QX to with think pickup I precast. the in

I if our -- area, and plant for a was what it say the were will plant in about largest of Houston. Houston which you was the Beryl in power. about hit million has Although of people park ParkUSA remember, no the which are because Hurricane down week that QX, power July, in out X.X there beginning

is that I weather stronger. starting but grow. quarter is see they're the still iffy to so in But getting though, third the coming much The think rain, order you'll book

you I follow. Dodge come that to the business confidence back, Momentum at in think something the Index, the when especially we nonresidential is starting look is which

a stuff, the index things which was in impact IIJA XX% 'XX don't higher little the side up and pipe because year piece up If is that is forward-facing it's mainly -- amount we it X% off public-facing on public-facing pressure levels. The you a XXXX the commercial schools, from about look I institutional is of at see than that, significant funding. the of that's mean, June is ago of things, with bit, steel our that, which like or hospitals and in

lot going good on. things there's think I a So of

Geneva I as to that we -- about get is the that Precast first is in think say be kind business the half the which booming. The was is steam everyone the because year. into things we And up worried residential about, of Precast strong. XXXX Geneva, what And very very, year, I part the is the of our right, would to in business of the book environment consider revenues. business, similar Precast would piece, we strong, the the and what slow higher The what very, with a is is rate after what very those the start order saw was really interest on second locations of side, picks but business in

we're we're market, some on piece we booming, So the issues big the and had in in I Utah that's road better to side especially second of in with bumps year the think saw commercial come side still seeing back. Precast because than Texas. weather the expecting the residential the half just the a We the of starting year in because what really much a first along

Operator

Davidson. question D.A. from Thielman Brent Our comes next from

Brent Thielman

is of Park? Scott, year. think like visibility margins Precast because half you here. versus case, that differential Geneva? from recall the in improve it the sounds principally the that's just sounds at if Park much us of increased can like contributions improved Is the help margins you from into And it what And should second

Scott Montross

be, -- order had the from amount Geneva to some already -- will of price up. infrastructure the think of increases increased to the stuff. we've book go we've several from with precast Park. had on continues I the But extent, the Yes, side And business it contribution

improving margins margins Park and improving. Geneva The are the are

bigger the the level some to sides earlier Park of start from from as the on when you a get picture both that's the moving we ground and we rate of environment. as interest it. then the it's And piece weather to they be when impact on -- on piece, go going forward So get of back stuff

when or them I price and selling first in as and looking look you piece of as it. And have margins much you're that margins, of good up, part the because at is precast that's a ultimately, year, year, the at both the see Park in what business, of Park the you increases market their but of larger that shipping becoming down, it's think side the pushes earlier it. the products that's for of high at revenue was what but the but both It's the are you're that aren't piece being looking the into are. as a Geneva products cost bigger

So you're I Brent, of mixed to half the Precast. strong going together, second year see in a all that think

Brent Thielman

And play? more Or think then, plant close to Is I RCP that add it's of is change at to margins? the potentially finish capacity the line. Scott, a a that Okay. Geneva, their structural

Scott Montross

It's both.

I takes X,XXX going putting run is the the it. we're or run versus think the or which X,XXX have to that there, The to facility biggest City people current is Salt exact XX XX thing we to about X exact people it. about that in about X Lake take

higher have very production going that profile lead a of it and on well margins conversion you're So and to capability. level to better higher cost on that should

a double-edge better that's higher absorption because better got because you right? more overhead you got capabilities You you've cost, there. sword, production have So a margins then and got

create margins not we're as market the it's any in And I It's we're upward both expecting as think the it in stays change things. those going market. the certainly, those long near So seeing an like to future precast really in movement of that is.

Brent Thielman

or years. here Okay. environment And whatever. at least mix next with characterizing, sounds But in for mean understanding on Scott, margin it couple SPP, of variability quarter-to-quarter to for you're you're I healthy have that going the this pretty

on trajectory improve years. the there's presumably quarter-to-quarter, you fair? for years? that think in higher of some tightens next asking trajectory, of sort I'm over a to obviously there's from think not the few continue this but margins opportunity forthcoming an Is them market the do As annual to you up,

Scott Montross

And keys in strong sized backlog few and about last years which historically talked year. we've a as of the multiple now row. the one business for we've is Brent, pretty high the backlog, of bidding Steel bidding years characterize Pipe And past, in as Absolutely. had in a XXXX decent I I would the Pressure think

are But going with I even forward years. funding bigger think what IIJA we see

So on you where that and levels getting the Pressure multiple start in Pipe XX, XX% versus a to gross Steel the XX, those start XX, we now second when a quarter. are you with margin ultimately, seeing years is start things row, in X side

So point. we're starting to that at kind territory this into of get

But then to fluctuations me but like to said, you X one you expect it's we quarters for quarter do have for third the the and in things pretty quarters, quarter third Pipe. hard that record row, within is strong about of the sit be here and Steel predict a a Pressure quarter

gross So as a the we've momentum strong of backlog, next upward because got I few and over the market years. move forward the strength on just the got think we of we've margins

Operator

from next Our Northland Securities. Ted question from Jackson comes

Edward Jackson

controlling I which work as begin forth not but flow, and of cash it's great on for also can the you it's in team, and congratulating set just the a want And capital something to execution see you with it terms in was strategy and on working the management results, see. the you quarter, fabulous, to the

congrats So that, too. on

Scott Montross

Thanks, Ted.

Edward Jackson

should of I'm is happen what hit, third around to circle weather, the but because quarter of I'm a in And terms understanding the that one have just ParkUSA, we see saying is you're and regarding been questions, if of during quarter. In few. not going to did the them business lot a my Precast second

have quarter. should good that picking your third we volume a a third a you're little so that bit, in fourth kind not the than because of see in in Is stronger fourth because a we second should issue, Precast sales a timing And the quarter? python uptick a, kind when in quarter of it's pig say, quarter up that weak, should quarter really is but happened see

Scott Montross

days lost we say, Park production Yes. in business third strong. to really Houston, the in Ferris, X/X lost it expecting power I lost in We San we the the example, affected weather the of begin I days how we X and the was. into work month we also the the placement said, flooding probably Houston lost starting order is Antonio, stronger the but lost because for production because Ted, at up. business like the just get I and to Geneva was But in because would quarter, pick we days. people quarter. Ferris shipping -- bad really, people a And and out. X couldn't is mean But like, shipping X are in of second -- days also of that

So pick placed and little loaded like get up. the end both Park it's be just in for because second a said, the starting were our back-end sides starting it order back you may this order at are business But now over the for in that's the you of to $XX book now to again. up up year, -- really because to bit quarter that some And just orders can see million more of we And starting orders is the pick of order filling book books. the in just of again. Precast kind

Edward Jackson

of all might not we clear the -- weather well? it some So might you in issues, into see some kind fourth third quarter, of could trail as quarter these it this not -- the

Scott Montross

to Yes, point, not. Geneva, If to cold like maybe get would were Ted, starts snow. guess that to as and I as Utah it sudden, of quarter in this because far starts all at I a the say fourth

demand to -- of slows didn't the Texas, issues down stuff, installs pent-up and on that going things get you're in But field to you're the orders from have that. it placed. getting going doing think little the in like I weather So and bit this the contractors have a

bit little do. a quarter a that's So we fourth we up may end normally seeing larger than

Edward Jackson

in to steel half that out that think given putting says Okay. fact you strong, steel you're business you call bit. be remain and it you to 'XX? your bring than year per where the -- would that we strong you're think 'XX average And for second in this did pricing through price of kind I half putting do business half first over let's and looking up strength. When going steel works, pressure the to is. And it's is would -- begets the the down to second the revenue numbers you quarter, to that it, going 'XX, my how you're your lower of stay third to pricing, Do business, how ton about just roll has we're going sense fact Shifting think I come range? again, you're the of the quite a $XXX the up the to of of up. as SPP mean, be that play -- $XXX steel for

I'm that, my guys about bottom just a the It's mean, and you pass-through really about what's you it's But in it's I not for about when with pricing And guys your line I like kind of saying know top for kind your manage anyway. because line. you of I of really because deck the you mean, the what kind -- think model such, as of kind business?

Scott Montross

revenue or steel last, we've say, I'd the trajectory X X price on and upward fluctuate years, be steel pressure to continued for the pipe. over lot, on Well, a an

back by XXXX in back and dropped in was ton ton. year. a of a it to down XXXX, then below $X,XXX a $XXX end seen And ton we've it $XXX in So the the the

same the it's of just kind fluctuating around. so And thing. It's

and lows. mean as revolve a that's forward. going go to forward thing we probably $XXX market, between go one going in it now, go it's bottomed seen the down a like, little week move the And started ton. for and highs a out I we this example, last several ton $XXX up the price around expectations have the our has steel $XXX see to back we've about for would you're to But bit to weeks, at again. a as And and price that say, are probably seems The

making bit So little it's the capacity now. start start ton, an thing this steel $XXX production And a they way difficult and ultimately, a kind taking about on they getting of having more off cycles start so below and that forth. time guys so money. Because once interesting

a ton number, $XXX revolving into we see that Ted, still So you're go to as I around forward to think the going future. it $XXX

Edward Jackson

give steel, I sense percentage And know to steel was for mean, a quarter? not your exact, you can on but then what the Okay. the COGS me going you're give of me of sticking I

Scott Montross

I think, XX%-ish. probably right we're around now,

Edward Jackson

world, over of side you're better did then say bidding and actually a having means of better this keeping Okay. it, And that the kind you just margins. on bidding environment, better environment

the within So see year, second implicit be the structure to just margin to that guidance quarter the similar expect for to the it's if second saw fair half everything... we for you're the assume to of should what in we SPP that bringing

Scott Montross

the on your steel profile? up number Well, a going you've the the mean, now the lot -- things is to I you jobs And of in like jobs on a this and it's what of cause is differences the in job We've work And fluctuate overhead quarter. jobs? of will you're I have into yes, production fit probably I -- it similar fluctuate does And overall think Ted. of frame, specific that ultimately, jobs how a gotten one and have what are think absorption in these great guys in little that's pressure a bit line based production your to pipe bit getting to level? is, what The time little thing that will running taken. that, comes it to a done

have because and have then -- side plants, of the though, the going year have you steel bit rough the do our I start issues, too, to we So we're have in year. remain them. pressure pressure quarter holidays as pipe is quarters remember, on a little that simply on you X this steel upward fourth think, major trajectory an where the weather we But always go you pipe that through having

So ultimately, it will fluctuate around.

had pipe But the I I think that year was XXXX. in year look XX%, at where last longer-term think you for basis a see average it from from, steel a pressure come you a where we've that on margin you XX%

the that year probably this a higher see it's we that. And to out couple continue of basis to hundred You're year move in, averages think like funding X production to going going a than few the a Pressure Pipe. demand or you and think kick start get hundred that into probably you're going ultimately, out with see levels to if 'XX to continues in a the starts in I really as to move and higher future, Steel margins points IIJA

Edward Jackson

you M&A this sense exciting. what's guys of a questions, done some looking That the know think we you anything are of is really next with X it's in way the not bushes, expect better kind kind brought kind end the there then is anything is you. terms of year, to of Could is probably more saying? if the one's Is you I something? Like that's at at there? and here activity me this an of shaking that end I is you know I got give there no I'm opportunity. pipeline, of the up a end about we what yet. year know Can important it? -- think there maybe could -- I'm before -- action thing.

Scott Montross

I now got looking. we're a doing interested that we've deeper mean in dive always right things we're We're of a into. that couple

a So especially we done on with them quickly, those like have with So to things tendency dealing could aren't a companies and are longer. -- to get public you're so that dealing right? and it's family when that, be little drag you real companies bit businesses hard

paid did So last million to we because the about to chance now X tell facility good getting in some getting I integration just we're flow we're And stuff. about speed of the since by that up cash getting the a down on can Park it we're years that. And ready $XX -- is credit lot second to cultural that focus from do end $XX where where getting from it's And we it down XXXX dropped the million point action would you been pretty you'll the on and and of on a to that there's the quarter. going see us by acquisition. say and going

year that expect end to are position out we something to well I of this we there and trend done. imminent through But that be XXXX. would the that expect say us and continue -- are So there, to by I get thing things this next

Edward Jackson

not it -- -- question's super, asking. too. last on the Again, I'm congrats not very, job what? hope even quarter, kind my super know I worth you very of Actually, of you're proud Okay.

Scott Montross

Yes. Good.

Operator

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

David Wright

report, call. analysts water to SPP I'm EPA charge. on to the cylinders, great all larger And firing slide category in want you and see of question, from the Great this I previously pipe at glad fall to little here ask so of a a your questions lot of distribution you have the pie consider would the where or chart looking transmission transmission? deck, source in

Scott Montross

transmission. be would It distribution more

David Wright

Yes.

Okay.

it very appropriations the a into you'll of actually $XXX and the years market. more call the the couple of start and So excuse at near need, got much year they've XX-year you've made And -- out, -- for X/X me, got said at business. have funnel And the out looking then in of I'm near that's they've the XX XX-year it needs pie, not see that to in billion. has your kind of that it you okay,

X/X. you Northwest and Pipe's that share at at put market $XXX your And share transmission, million when put you about you in million water to around market $XXX talk

of the be X of to your down that, isn't you to steel than years million isn't market million the reasonable larger they year? reasonable competitors, So capacity use, their think $XXX use pressure all I road for don't pipe capacity know much $XXX it to overall and particularly it should a since how think few but a your don't that

Scott Montross

for the with is. what Yes. our expectation IIJA-funded That's sure. stuff, Especially David,

quarter. So had pretty in utilization ultimately, we a second the capacity good

at I think pipe. we're steel about XX% pressure practical capacity of

still that can more right? we do, So lot we a have

to like results is Pressure Pipe you'll pretty some boom see boom, I it's side. we good on think ultimately, So Steel there, going if that to the market and think going it's

David Wright

right. Right, right,

you So But years to and seems mean bidding years. better I the and should talk me better… bidding good that it bidding years about can get average just

Scott Montross

Yes.

David Wright

larger, And and So right? your even are better. margins though --

you're it's part company still So going transmission growth in this to the be precast, a pursuing of water the even big years in though if ahead. happens, pipe

Scott Montross

Oh, yes.

David Wright

it's great. so And think I

footprint. You've the got

got the capacity. You've

market got and the on doing just the You've reputation keep a job. great in

Scott Montross

will us. are big years funnel Yes, got that going some of be market in Appreciate starting reservoir of the up mentioned, that. screen, that it the I you we've just jobs. California, job in reservoir which this not front IIJA at of And the on in sourced, big -- And on. there's to have money -- the some but has job, the as mean, to much the other is see really point. we're come we site's there's jobs some Thanks, source David. and the

Brazosport there's plant another Christi project going that's down basically project transmit big triple and $X.X a in saw out Water Texas to one and just Fund Infrastructure over was SWIFT -- alone that's have fund that there, those $XXX that. Then capacity to where for billion is Texas, which in that's the just water We off-channel the the project in project, going of million. Corpus projects. about is thing going there just seawater $X an of projects a project -- a about come And to to State of some in to the supply desalinization on But billion. they're storage reservoir allocated down [ get additional ] State a going

in So memories there's 'XX, little really some the right all of the kinds that on and now like 'XX, there past of to stuff that horizon of 'XX those starts years pain it some we've the through bit. relieve out makes a gone

one based I'd us say XXXX to production, Even managed -- still we together and Pressure on in So being on in consolidators of the a big has market. bidding Pipe XXXX, really good decent in business slow Steel and pace. put a a with the pretty since been year relatively year

of think produced. how just of projects big. have get periods time I here you'll are and big the And -- are years It's but they really when sequenced kind So and down. and to slow dynamics that's the changed going it'll bid get

the a in good through Pipe IIJA over right now Pressure about see funding. Steel on projects trend we But upward really next because XXXX this pretty of --

David Wright

you're I Well, significant. it not in I make revenue. year, close but that's mean to really will pretty billion $X.X maybe this mean quite you

work. congratulations. Great again, So

Scott Montross

it. Appreciate David. Thanks,

Aaron Wilkins

David. Thanks,

Operator

to I'd this floor at time, back showing closing for gentlemen, and ladies additional no I'm the turn Scott And questions. any Montross to over like remarks.

Scott Montross

closing. in is half to coming much takeaways the are think very expectations key strong. few a second the for One, Just bidding the still before I XXXX and pass pretty

expecting Steel the year year. this have we're So business Pressure to very Pipe strong a

after the second Precast. with because a to weather to half rate be with I -- the of expecting significantly mean thing some slow stronger. of the interest issues headwinds environment, first of related some the we're Same the quarter and

to in our growth more the were are It's XXXX, revenues Steel than And was -- of business. we a adding now Part side Precast centered with our where versus when tripled mention. strategy. the at more of this, doubled. than Pressure business look And where the And the have Pipe we things time you frame. stabilizing to last over that our the around couple in company of has

side, projects acquisitions product and So things organic to from some are well And doing spot not be well of growth ultimately, from be of the that we're the doing we growth we're on the continue think the And for I spot track these our the great a population, potentially to spread, Precast but the precast only we're in increasing that longer into a are company the due positioned great working. future. going in on infrastructure to at and on term, plants. different

in decent is biggest can the looked our it weather to big going the second like together working. Even forward. were it like numbers you should strategy a fairly that without perspective. from by with is the and our the look put and think what imagine, severely the see of And takeaway what business impact quarter being would weather impacted do implemented part we we've a diversification business quarter, I able have

and are the frame. in on be attention the we speaking our things time with your call forward to you again November take working, time today appreciate and these ultimately, look and you So really to

you. thank So

Operator

conference you that, and We with joining. And gentlemen, be concluding do thank ladies and we'll today's for presentation. call

You may now disconnect your lines.

Northwest Pipe (NWPX) 1 Aug 242024 Q2 Earnings call transcript