NWPX - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the Northwest Pipe Company Third Quarter 2024 Earnings Call. [Operator Instructions]. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this call is being recorded. pleasure your my CEO. Scott now is to host, introduce Montross, It you. Thank

You may begin.

Scott Montross

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

from detail. our review of quarterly no for and everyone As other regarding key we I'll factors delivered results records financials walk XX-K a with the differ begin, of our you SEC statements. Thank that future actual I'd will obligation begin new Aaron our third could joining third achieving we the December greater us through to for quarter from all results, XXXX. forward-looking ended discussion such expectations risk any year actual differ made metrics. expectations. like are call to XXXX, to expectations. in this could outlook our recent performance statements, you materially Once then and refer update in again, today. financial to undertake for and strong remind filings our results most We on Form the quarter that XX, a several forward-looking statements for our materially Please cause in

as on pressure our ongoing precast was of as by pipe well our steel growth performance side in residential driven Our business. the strength business

generated reported million, revenue the increased strong third was X.X% our reflecting quarter a the gross $XX And also quarter Our consolidated the ever company. the profit second record. of outpacing million highest sales quarterly to in and year-over-year $XXX.X quarterly by net

segment totaling million level on pipe line at flow our steel our further results. management X.X% our pressure effective record increasing helped year-over-year cash Revenue strong segment working generation. To $XX.X another levels break and quarter addition, in of expectations. down from capital focus remained In our drive with near

production second Our the XXXX carried the of in levels as as due performance has the continued in over well reflected environment bidding strength half into that timing. primarily ongoing high to changes

SPP XXXX, from $XXX as and confirmed as including Our backlog, June million of September XXXX. XX, orders, XX, of $XXX of from The million was down XX. as $XXX down September million

has timing backlog Although mix the in projects. backlog our bids number done of and with to team the a and steel bid the in backlog attribute lesser tons environment strong bidding declined, expected significant backlog prices. Nevertheless, we quarter. executing job primarily our We healthy and to awards, our expected in job of decline to remains extent, the quarter SPP fourth lower believe remains on our a tremendous a third

As our a to through we result, improve expect backlog year-end.

Our partially third selling costs. quarter by due lower material offset lower prices to performance raw realized was primarily

to X steel ton about stabilizing prices of weeks. they lead the $XXX volatile per the be quarter, were to appear with standing X times course third in range, While throughout fairly the at

strong Geneva robust a our the in by production year-over-year Now and to our operational strong levels. our new backdrop XX.X% field of turning shipment which Precast a precast by business, execution teams resulted of residential increased and revenue of driven record million, on to $XX.X segment. continued the side quarterly demand in

rate current related Park commercial on precast of nonresidential our shipments continued impact construction business portion environment due the offset construction of strength, of interest mainly the portion of the on to the some business. However, this reduced at

our To events production is generally continue severe up impacted rates in months XX% in versus which projects we in for a extent, to a levels. market this become expect to weather Texas lesser experienced by reverse the prior July. Currently and and down. We also as construction segments was tailwind breaking ground, to come nonresidential respectively, the about are year's X%, commercial are the XX planning, and that in institutional going the

time to planning breaking length compress. between ground and As is expected interest rates the fall, of

As are the in expecting nonresidential strength we near-term market. a result, upcoming

part On precast XXXX, multiple the pricing business by the side, throughout demand the of we've enacted driven increases experienced at residential price our has strong locations. that Geneva

as it downward However, experienced nonresidential the some has negative commercial impact and had business elevated demand. interest of our on precast the pressure pricing a environment rate the result construction

near XX in strengthen additional Fed to September the year-end, initial the expect in cut the term. construction are and basis before With rate expected market cuts that nonresidential point we the

September $XX June of traditionally of the modestly from the as September resilience enter slower we it time Precast totaled $XX XXXX. XX, year, order the from book million segment XX, XXXX, reflecting as down and of up million, $XX was of XX, as As our million this

resulted up XX.X%, year-over-year company. in reported margin consolidated gross XX% XXXX. gross the and a the increased strong current of profit third SPP for quarterly new Our gross gross of profit configuration $XX is in from the third quarter to of we've record for margin quarter the for This million, which strongest quarterly the company. XX.X% the a precast

changes we've points margin strength the in strong, primarily due production product This, Our over high points experiencing. volume overhead the absorption SPP XX.X% basis of to increasing in strong was by as been over prior activity well mix. year gross the and in XX to addition prior as the bidding period XXX approximately with basis quarter, ongoing

the the changes over of by XXX XX.X% market improved strength on the construction the Geneva product mix. the quarter, in Our construction the prior ago points gross year basis versus year precash points approximately location strengthened Margins prior in well residential resulting over the of and side period as quarter. basis residential XXX margin as primarily from

rate construction indicated, by creating adversely market commercial some margin interest As been compression. environment nonresidential demand affected the high has

reduced overhead impacting facilities, margins. levels, quarter third on not further the weather-related also production third early to production at our shipping but days lower early only addition, impacts revenue nonresidential and In severe reduced leading quarter Park absorption

provide over of Texas worth strategy on product business. spread projects update have worth like and the outside Precast booked our of I promote million to an Next, $X state approximately growth $XX of the organic to orders. bid million of in Year-to-date, we would on

result production efforts efficiency approximately projects. As ongoing to maximize we utilization plants overall gained booking additional park-related the to volume. Further, in and plants our of on capacity of spread precast enhance our Geneva Utah at Texas-based by a at $X.X million traction product

projects to excess at look $X of Our in in goal Geneva million is worth XXXX. park-related of

pipe once As planning scheduled stage park to geographic occur Pipe is additional at capacity, in and Precast positioning the established plan product mill that current to Geneva strategy This City years. Further are we business is the locations, our at and reinforced and over couple facility the of spread Northwest new we production the for report products expanding to Utah previously the capacity Salt is in Lake additional completion. additional Utah capabilities, our to investment manhole expand growth. pleased near next This unlock noted, the to our our will locations. concrete

candidate shares reach to by our in be in to accretive manufacturing and the growth repurchase would the margins strategy production incurred evaluate continuing opportunities, organic [ efficiencies our positive acquisition finance deliver strategy, and cash of The repaying geographic organic may Park consistent opt addition our progress absence possess would are our and generation. Properly philosophy. expanding potential execute precast debt, we space we've accretive our activities, top we growth for allocation precast earnings, to a to our increasing remains ] product portfolio. of flow to that our deal In accelerate capabilities actively XXXX and And of related our help in strategic common M&A enhance stock. growth, the focus capital opportunities USA strong our of

shares in we approach of third since November shares our of the September XX. initial bought during $X.X for as back million repurchase on While a opportunistic XXXX, repurchase we our did remain not share of any total we in the quarter, authorization XXX,XXX

relatively I due to we've stronger slowest year major In that the overall to a booked fourth on we being holidays we than as I'd summarize Before projects our SPP generally of year, it recent business, of impact years weather-related anticipate primarily our quarter revenue a for well volume. margins quarter as of in gross X we for their quarter to production expected fourth of mix related strong seen events. Nevertheless, outlook to expect a and the be XXXX. the is and conclude, quarter despite like fourth

website. amount also portion projects which strong be investor of on of steel on We the the remain expected we're activity by the remain water found and volume Relations can backlog expect to historical detailed given of upcoming of presentation in our seeing for Investor current standards transmission our pressure by our XXXX. Further, encouraged we bidding the remainder pipe

the business, stable Precast margins. year to continue XXXX, be bidding expect record We we to our XXXX sequentially reported the down gross are just revenue fourth third in to relatively with healthy similar from quarter levels. In expecting a quarter we

for safety we in We with shareholder the all growing Thank stakeholder team growth the I'm value. of success business you continue need pursuit position. In as significant housing strong given our infrastructure for spending of long pent-up the for Precast dedication quarter. level enhanced and demand, members of a operational in and the market of to term in to the in in and your in specifically and the very believe growing our mid- delivered financial performance the the strength residential U.S. our we to strategy continued execute third to and field pleased summary,

that anticipated to performance remain environment into to elevated be continues throughout year XXXX. bolstered of by and the strong bidding in is Our the a XXXX balance

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

Aaron Wilkins

everyone. was quarter diluted or and third of to $X.X share Beginning with Scott, quarter million per Consolidated $XX.X compared or income million in good per our you, the third diluted $X.XX $X.XX profitability. Thank share morning, net XXXX.

resulting to changes by increased the in XX% Steel pipe third driven selling partially XX% to pressure a was It increased improvement million in decrease an $XX.X was was per bidding environment quarterly third segment net a due X.X% volume demand quarter. selling compared segment million improved X% $XXX.X year $XX.X lower raw mix. from in The as record a in decrease million well XXXX. sales in project a produced, million to million million to material sales ago to X.X% the continued increased ton increase Consolidated XXXX. tons the by strong $XXX.X from product compared sales driven costs. Precast new in shift, to $XX.X primarily of quarter quarter timing. market prices as price XX.X% increase of in $XX.X resulting offset which to in XX% in by in a partially compared was changes This by offset of

headwinds Our the its Texas demand resilient that demand Geneva continued park for on also strong encumbering while weather-related commercial in our business construction business delays. was slowed Utah, performance continued by in

primarily gross $XX primarily also profit general from volumes XX.X% quarter $XX.X between the conditions. Precast administrative increased due from to Utah. Selling, sales or X.X% As products increased in quarter to of XX.X% of expenses we on million in unique shipment the sales and segment million or metrics shipment highly of third corresponding was to to primarily sales segment's The or sales average of and gross XX.X% third a pipe $X.X to of sales provide of $XX.X XXXX volumes X.X% sales case higher XX.X% XXXX or segment in incentive to and XX% quarter market the quarter production or of X.X% Selling, precast profit a of of to in particularly XXXX, do Precast, sales. million are was third $XX.X composition to of profit sales or production of million administrative SPP million compared compared volume million mix. Consolidated million not volume, XXXX comparable $XX.X for prices the general or increased and the the or profit of million XX% improved increased due resulting XXXX. sales X.X% to record, product segment the as XX.X% in reminder, gross to million are XX.X% of in XX.X% manufacture sales expense. or XX.X% million the increasing each higher to both of third of of or gross increased steel of compared dependent compensation the $XX.X XX.X% $XX.X $XX.X case increase $XX.X sales. or segments they pressure compared of and in expenses third quarter due the in periods always therefore,

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

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

we daily $XX higher in full and interest year $X amortization $X.X quarter approximately the in The third rates interest XXXX. Interest expect $X.X million. be million primarily to depreciation XXXX expect million XXXX, full approximately in expense We an and our to the year to average million expense be due increase borrowings. to expense of from increased

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

our have Our rate the statute tax the be fourth rate of XX%. for expired by range the year third the XX% that quarter now differences. uncertain in the change XXXX expect XXXX tax due tax limitations positions on expectation to within were of XXXX our nondeductible to is during impacted The of and quarter. of permanent to We full for

the quarter and of flows of to $XX.X I return third and focus condition. $XX.X stockholder key the provided Net XXXX in the for Now our compared million of quarter priorities. growth a activities, both in strategic improved cash business XXXX due to by remains will Improving execution our financial million company's to of transition third cash profitability. critical operating our the

be quarter the needs of our business and on working the pressure While quarters, between therefore, third metric. concentrate highly of cash annual our can variable free flows steel this capital key we pipe performance improved,

flows $XX full We continue between $XX the range to and to million year cash anticipate free XXXX. for million

the totaled in million capital compared Our to expenditures year third XXXX quarter. prior in million $X of quarter the $X.X

and pipe a As commissioning production the mill Salt produce completion concrete which expected manhole sell by reminder, improve out of Lake we new yields we efficiencies to that is after project and pipe City on year-end concrete anticipate and of successful year associated new in million of investment building which remainder to facility. Anticipate of $XX includes our total to and $X CapEx mill be million for range full and pipe approximately in the concrete million standard primarily $XX the our capital reinforced XXXX, in for replacement. reinforced

borrowings As and strong XXXX, we gross leaving million of the facility, on capacity credit records approximately summary, pleased XX, in of financial outstanding quarterly to line. In million performance. another our consolidated quarter were credit our we profit. September $XX deliver very on borrowing for had $XX.X consecutive additional of

our possible as a exceptional into employees' business are is remainder segment. These new returned our the pressure each positioned year as for like support XXXX now the pipe the quarterly operator their Pipe commitment steel Northwest and session. would by shareholders for their safety achievements to record will precast trust made to our over business it that the I for thank Our of Company. question-and-answer to well well for them and I in of revenue and begin execution. turn continued to

Operator

Instructions]. [Operator

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

Brent Thielman

is just you year-on-year. terms backlog quarter for comparisons decline much that steel just of prices Scott on burned the lower of or the XX% the quarter, what How Aaron, volume? versus down just in of in

Scott Montross

little we're through bit And we been of to to awards going piece bidding. in. thought slower for going Brent. this, backlog a I as right the get actually are it that coming some notified down. are ultimately, we think a it's these jobs the looking But go at it's to a That's of little things that of earlier, a bit and we've how now, just up expect decline, year-end waiting things bidding it's and going start it way were we're was

what were I down X%. are is strong. the only they XX% backlog the probably is price pricing the say -- year-over-year, about the that but versus for costs us about down steel think I And So level, would where

It's going staying year out backlog looks environment with up to we to what into end the at year next is price timing pretty pretty being there And a with we're the and the this carry comfortable of of matter So feel the awarded. good. similar. we're just job be pretty going bidding that

are years So -- environments out and what that these with out with going through. 'XX, coming of levels, tons that's bidding that or ultimately, up are the funding bidding are -- I markets, I 'XX get amount as would And the in but to that IIJA say they're are about jump amount not 'XX, the okay the steel numbers years. current really huge these those pressure pipe bidding of there, mean on are the think based we the to projects we

we've side got pretty the steel environment that that's the lot a And even price thing happened XX.X% due to level the to going responding is in and important pressure steel in to backlog is I when an positively, the right down. is just jump think strong is the business. an margin in front So in most now, I up But it's think of long and the consolidation okay of environment, up getting pipe the bidding with us. runway on Brent,

a So that. get with there's rock. And steel fluctuate. is like years business, much things the tonne like the cliff off at on. it in saw doesn't you we're where We're drop pretty that's seems comfortable barrier invisible $XXX going than lower Steel it what's this really to ago price a XX going around

see that You don't anymore.

to what too. amount around increase price of announcements back down to because coming we've a bounce $XXX will ultimately backlog is out, then get up start the steel which to affect it So and seen seems ton

answer, question a long-winded had a you that's that relatively but in of for I there you. asked, thought a get I probably bunch Now that to simple stuff

Brent Thielman

guess, follow-up held pricing it's perspective? do get of of I pass-through, SPP it, I and if profit on you constant I still Scott. trying know into just, gross mean impact it revenue sense the, year pricing to a a your I a think they Maybe much perspective. means a don't just headwind have appreciate you'd year since headwind everything to what have How of just from kind won't. but with that a a next from And in any next steel Scott, I prices, going essentially

Scott Montross

I we're constant it numbers not that think of now, it's this obviously, our coming that will kind in steel now, to annual I don't what annualized are you the dollars. revenue and from out profit it in, a steel gross the and without annual be. But is stays much a if at and come going change will through $XXX better if goes that raising creating the year. more really right I more think where right for million-plus margin, price range. this a it's way back it And the of create And big pressure looking pipe to create can is I the -- year planning carry but mean we're going that's plan. a changing huge up, mean numbers do process I steel pricing. anything see gross is

It that like Us, down to down business now $XXX. or in a major think market. stops don't right And pipe the consolidated stable ton pricing the really been at So Spiral suppliers price with I have relatively see Thompson American just headwind the huge has is to we pressure steel Weld. because X $XXX we because fall a now. don't and $XXX

of a because have fewer in stable And environment capacity people. bidding you So it's more it. ultimately, of hands the the

Brent Thielman

good. Very

revenue market, as spread, it's taking trend I one. meaningful in in guess, just in product forward, I there the precast there's et though some seeing a this out you seems your last commentary, think all this Just what given turnaround mean quarter. in you're cetera? sustainability going it

Scott Montross

a the at revenue XXXX the bit. that in bit think right Yes. in rates. the business basis a at last now of was residential There strength of because that higher big side we're the where when strong. But center say construction impact market is now excuse nonresidential things. on I'll facilities. is and hitting pretty if park hotels a a all to seeing side off the but the coming a quarter, that indicates year, a bit index that's of off bit again, up of business Momentum is about little September the side has starting due and going to than interest construction is lot we're residential data -- nonresidential side, forward, a momentum numbers beginning of point pick weather facilities. But little only is of purchased X%. really right next little quite drop the pretty in has XX. or was all almost nonresidential I mean create September now. institutional commercial Geneva is in basis not total mainly on the at look with at in little in Brent, the starts Residential about been right I of if that we're and as on Index at And And a point now, them up now business are of and all been the higher about I 'XX, that's X in interest residential us. the third XX% little continue looking but did X September X% the is a bit, situation the bit where institutional the a before, in those And strength we're held Fed off rate on to see the what would drops versus little flat, and XX more side the we say now, and side the the commercial right there, still expectation has forward, the are business up, of it me, going they're impact. Well, meetings and we're of residential a the twice momentum at seeing because out we and significant side the back well. But what this a are these seeing indexes really, the because Dodge you most kind cylinders strong to we're

So if we strength-wise, into the continue and that back at seeing have that market to we to we're grow strength facilities hitting Geneva it's all in the expect continue the to residential nonresidential on next cylinders comes year beyond. in go as we and

see strength business So of in lot that we right now. a

So we some And plans before to you're I sustainability think that M&A there. grow point. at be considering there there's that to even some there's this on any growth going that working you're may see activity continue

So there. I there's think good sustainability

Operator

question Romero Sidoti & with Company. from The Julio comes next

Julio Romero

guys residential portion What to the cash do of to? attribute free you resilience the

Scott Montross

And with I the -- market that's the it it. think around of state strong. been before housing Utah. have just same Utah not very seen as about the very, It's And in thing it's increase going off worried and we falling ago years in it talked rates. we seen the is net into on. interest and were But we've we've the migration

isn't stronger were interest it's housing the market continued demand pent-up And rates the market. inventory some when there high, stronger. of fact, and on the get In in to there's enough because

to the people we've still team And And and they've things like And So -- been sure what strength it's we're is at the to. things to got the think I continue a and very in and Utah it's Utah, getting executing Plus that's growth the around for move built. And strong and houses that right grow live. focusing the place market to we're just being that. we and really doing good facilities. the a Geneva at a in good really price management good are to market, on business. up Idaho market pretty making

Julio Romero

falling. you helpful. the of mentioned expect interest That's due -- nonresidential cash it. in to you term near to you rates strengthen And free portion the expect Got

'XX And if could a that an -- on trying event interest to of Just increase how help through? even secondly, the first public nonres rates half us a falling point maybe much versus near-term that event, second should 'XX? timing be put you that in strengthening. finer flowing maybe 'XX a half like spending from or Is of strengthening of then

Scott Montross

Okay.

So again? first part the what part? was the first piece was What

Julio Romero

finer of when trying event the [indiscernible] of Just or timing better, first non-res there like to to a of gets [indiscernible]? point

Scott Montross

when Julio, these in this before to index, coming get the are planning down. at it's bit rates actually the projects because things or do fruition time things months starts. to these this Normally, looking down, interest coming about XX you're with going for a of rates usually momentum breaks that the into But project the -- have come stuff starts interest compressed to waiting people been to

production facilities versus where it up probably the last So year. you're of park to are right quarter-over-quarter the seeing some or concrete -- of we're of see beginning yards starting to now, going

to up. starting it's move So

to non-residential to expect And it part then think have really strengthen going you're to XXXX. to out past the cylinders. seeing we we're it So that strengthen both point, we later when mid a going what hitting the I of bit get strengthen. see that probably or mid-'XX that starts when what it's And be slowly. mid-'XX What next it's really little question? to of -- to was it to going is on residential is at and a all And

Julio Romero

public gets and resilient that's going which stay nonresi of you well, as from strengthening should of of after kind through, the also that hitting interest I the out. non-res near-term should second Yes, on you how the all an even better just following rate cylinders -- part flowing that, was then are but from et residential my the really had cetera? be question funds answered And IIJA of spending, was much question increase an in

Scott Montross

Yes.

talking do we're the about with piece, precast really about going when stuff really really rates nonres interest So is taking right? really, the pipe the The residential -- drive into talking the that, what we're to steel res, nonbuilding the or more really, the for business. So to be commercial. to and and are pressure account going it's going more IIJA side that's

we see. front really on that all think, we any what haven't I of in So even can of seen us yet. based That's,

in it's we stronger to the rates is us, So more and fire script, are the lead around and have come Utah, in we of increase and the facility about to that revenues they the start in interest the capacity that's down, going residential. to to exact business and rise -- our on just the ready it's the fire. going XXXX gets is residential higher as just up. And to production side, stronger. our And lighting what margins kind for increase and residential going efficiency the market the getting and higher talked capacity does And in

see up the the in growth nonresidential can XXXX. I 'XX the increase on And guess, market into into push really, as go we that Precast side. So we late

look prospects So the really strong.

Julio Romero

context about And flow then bit. talking there. the one free a just maybe on Great me be for would last cash little

pipe you even can pressure And You think had quarter strong variable on the trend that Does of tick to upward SPP saw continues Aaron, up sequentially. day sales to day as a We pressure quarter-to-quarter continues continue do working capital as I needs be steel little mentioned price the do sales well. well? steel another bit figure here of to kind a basis.

Aaron Wilkins

for to the drag through free working a efficiency go not bit the come bit third. is X in it's larger more fourth tend your little bit quarter It kind the typically a there. little of cash capital does see quarters fourth by the off the in and a fall especially be a of up lifted of year, and to atypical quarter's Yes, which Yes. days second that direction, little

aren't right something seen relatively in see We're to them as fall now fourth expecting off other to Now much that stay we've quarter of as our a levels years. expecting actually business we're elevated.

profitability. thing this the not quarter capital really get quarter I'm So But second of quarter next cash free really in than is third year a compared more the I a sorry, cash flows it, -- for the propelling think -- biggest think in I our little quarter, fourth ago. the year bit bounce third got our to our we is compared of Julio in the kind we'll of working to

Scott Montross

pressure with the cash pipe the And along and of upfront that worked really the progress, get out paid big we're contributing with we of business getting too, we're steel steel thing managing that. the of paid cash flow the pipe with that the is can forward, cash pressure sure in paid how of now. is steel cash anything going for piece Julio another that we've flow, is upfront for for getting piece and making that, A efficiency that's mining on to

in to business, and lot it cash part because is focus year into getting that a approach idea the way cash the of the That's level not business. is really and know the much cash bumping such focus profitability continue business And think going that's we is means a a being to and cash the the driven maybe goals that a team which think and to quite flow. is really well a compensation of in, lot, to flow we obviously I it for means right? So the this but really the us. variable drive as responding I up So means the now company, the for as

Operator

Securities. Jackson The comes Ted next with Northland from question

Edward Jackson

quarter. excellent on another Congratulations

First of California of moved that you going have tell have all, Utah. decamped I a I'm couple that friends and from to to

out in. on and the So the you helping move cost they're

Scott Montross

we're better the be. more to The going

Edward Jackson

you, big. [ man]. of houses the concrete I'll took a to build trust lot it Like

really, margin. I that we And excellent how margin to and SPP for when look ] call it, such. rates you maintain of of in that into But the margin business. look backlog for you end have, like And or look put utilization for capacity at know if the the kind some about of margin you XXXX? the of out that? XX-ish% generating able that's you're we then higher On I the backlog, at the think [ a really of mean, fourth and would you're were when quarter? SPP up of in what's profile that, we historicals And that it, up couple you've quarters at

Scott Montross

Yes.

the we right? going weather storms, major X thing And in quarter about events, is think fourth weather events, the things like fourth to quarter. holidays I the that? icing Are have

little it's a lower. generally, So bit

we're been that the like strong, stuff going in is fourth of XXXX, expecting quarter. fourth a we're right? see be Because -- to been there's to that know of what forward. We in business in we're lot as we going be a year. is to bidding, don't to stuff think going going levels But through to it see the to it's to going production going levels it's be similar lot XXXX, don't indicative like margin be I So quarter this to think is going

you has overhead So Right is of very is would been utilization. big and XX% the margins capacity now that pretty strong the are right? really I strong. at in production relatively tell getting a absorption, we've facilities, capacity that But we're a about utilization backlog The amount thing been strong.

with we higher with up get even see start it ] when IIJA year strong looks 'XX not and at steel pipe multiple little start funding. stay be I like XXXX see bidding demand. to putting think That's that [ the 'XX, you think seeing like if sustainable. And the when like business beginning in levels, X in to going going margins we're with you too, it's pressure years So that and stay what but decent those together up a 'XX, I a being bit margins start maybe the you

our years you over margins on months been don't announce those And think seen we I that tell the recently very have margins what monthly be are results XX% is But can steel where see basis. strong. pressure a have in pipe. we you I'll

forward, see. a that So sign expect sign, good it's to we bidding going with especially good for the that's a and

Edward Jackson

So just me, were if take down. I you to told consolidated what

quarters, which next the and pass utilization, control, if completely for a looks always out it your it I you happens results the of If it, the that all environment call something see next to better understand in you beyond sort records. on in like it and outlook have historical it pipeline being the push the couple basis, average few the an way equal as you like take years, it there's let's you that will comes seems margin might of but push into, you business that

XX%. -- that's you north If you the of you're for guys, I starting mean top regular top isn't of margins close get the it? to

Scott Montross

have but margins the going a correct seen XX% lot had Aaron, in to in I high a me on. quarterly work we you and think if I we've wrong, I'm past think margins. quarter. as of we've seen as them

environment an get this So that's you're you coming XX%, like see is Ted, we could mid-XXs those the XX%, about I the getting like when us. seen what we think knows? start over jobs I who top margins that with hits XX%, And think. saying all think that again, probably it But mean, funded -- -- you of seen. right, at but haven't we IIJA I into we've

Edward Jackson

CapEx. Okay. Switching over to

we keep and what When you Is So where CapEx million? off? would $XX XXXX million, deck would that's of see CapEx million [indiscernible] probably projects about But piece that, there had keep know something mean that's Geneva put they about do, you I Lake $XX a around Lake a it, with would going to that past. it the to $X million? it in, CapEx there going when up Or come from City see -- big are ask they're other falling down like big, like really you're at a Park from come big me we project. drop you $XX I I I level CapEx 'XX think if you back $XX else CapEx, in is projects going during you to Salt the into had XXXX the plant million? you've -- And on have call down to big -- the think expansion.

Scott Montross

Lake is that was probably -- it in reasonable $XX this going we things like the when excess in million we're but think I like look $XX I the the million, $XX to unless down million in exact over think a of we doing, million years, did $XX I project. comes spent at with was we of Salt a million, with think million, No, of $XX area project XXXXs have a project don't on forward or number big that City. That $XX

at big project So in ultimately, in in look $XX like if $XX range. level million, And area that, the right. probably $XX right million, you depreciation, it's million the minus probably the a it's of

Edward Jackson

I And that? something there because getting you I find hope where things get that that, regards trying guys perfect. around like Geneva the you you most Okay. have sustained discussion? I with any that your always find I is something ideally, have say get just cross-pollinating, for me, the in I well know Is mean find mean, process it? described would and like ideal you to in that something over you're be we're there knocking mean you thought active? to bringing been you just in. circling stuff. know would, mean done is time that it your M&A. now. the if looking to you're -- those But that then to knocking you're really acquisitions. haven't would wanted point Park that hard, into trying sounded kind line? doing that along. And of Pipe it that and of of at this actually in I I to But once Northwest to you been best point work it around it's businesses. that They're kind done not to that Can come think I it Or And of the kind I where we see something of what's XXXX? integration acquisition,

Scott Montross

by to area something focus. And would would by mean with people on M&A to like We done XXXX, XXXX [ things. We're always it's an discussions on something we're of we have ]. in and have like ultimately, I right? working always

Edward Jackson

my talking then is backlog a Scott, go, final I'll question let bit. just So you and about

sort want a -- clearly with steel are months you the kind you and volatility You like a what's volatile see you have of kind that bit could expecting the for into prices, offer something of rebound given ago relative which how detail the of to say, fourth always quarter within the But put the fine. don't touched today's is a and us. quarter. because But the forth you it rebounding it get last kind about kind on this too you much context backlog of dollars like within apples-to-apples But volume to color? I of know some and backlog to, this in number basis, call. of of on XX you

Scott Montross

Yes.

it way -- is volume lower it was. So look than right little a at The the to is I think bit no. now

So next of little orders. that backlog in should from we to referred part you waiting towards just backlog of have we get backlog don't year. before that bit hit tunnel actually of times we tonnage the the it's lot when backlog on as backlog. a it back a the backlog, end thing tons in for come have as have us can long tonnage-wise X also into But for there a years because down this is that year turns to which now. What that and But or about. that actionable, in fuse the start right areas up some much where through in we we are pushing We asked in of makes work it's we've and early and work is in up be been

off really like prices fallen year-over-year steel said, at And you look prices consumer much. about I haven't down steel us XX%. for are -- that and not So

price only Our off is year-over-year. X%

So the staying prices are up high. pretty

be periods to it's asked not pretty get as to the going that year, quite are so Ted you And through about. of end those tons this the apples-to-apples, but we similar other

Operator

David The with comes next from Henry Wright Trust. Investment question

David Wright

million $XX congratulations. my offer I'll net. Well,

got You your XX% margins.

contrast sounded -- feel So for asked Utah informative. good. would to how extensive long about and ask got wanted with in the said the you you've it's super to that And that thanks really a it Ted that Precast, like cylinders was? Texas that at How about, to better SPP was was have it that discussion about margins been you and I all time, good filing.

Scott Montross

down David, bit. excuse that's me, Well, Texas -- so a little volumes, has been been lighter Ted or

starting few said, side nonres are margins we're of the point the cylinders hitting the side of it's level going that's amount on because on quite the are business. And because So the to hundred all by facilities. those park that's come I a higher on point probably like higher -- is at than several the of the not back. at this residential this nonresidential to points and absorption light, And just in basis relatively are

at than as ultimately, expect at that is obviously, if of good, when the facility margins we be to it's better they So part more not comes the because, product. back, a are Geneva specialty

and the point. is a right Geneva at I'd points say, facilities several are So now this though, it to about, down, higher hundred basis few

David Wright

What release mix And talked you the you are selling of? about Okay. you press when in decrease and changes product products in mentioned selling to precast. in lot price increase volume, in due a

Scott Montross

a products Well, now. part Geneva the right -- bigger the of precast are part Geneva mix the

So carrying generally than those are are more products. infrastructure lower products that selling the park you prices on what see

big part of a that's product part the So mix. -- of that's

And [ seeing of facilities. a at but lot a a concrete that call Geneva it we're and really lot that a price of good it's it's -- ] not huge cover lot work, [ work margin. a it's of the in is thing carries especially up, is ] other The

we versus what's a couple And what too. precast bit higher overall, it affecting saw I mix Geneva so really maybe that's the And ago. of a of little attribute it's of it, shipping years to. and that's what But would

Operator

At turn closing for are queue. this I'd the further like Montross comments. back to there call in time, questions no to Scott

Scott Montross

Yes.

And gain a 'XX in on expect we pressure we quarter Obviously, the a Just continue strong quarter. of about steel strong side. we Precast a to on to few the similar takeaways expect in year. very for saw to before side. we've that what leave. fourth XXXX And pipe are as talked call, this we levels with fourth Really the we to expect strength be to finish

well, gear we're So into repackage the And pretty us is side. the as funded going get Precast IIJA kicks the SPP again, really business XXXX. to Precast and we're the going that some the business ultimately, grow. we business and -- across midterm both and probably the The country. see through and the and or is we're positioned fairly talked the time. We've spread going And at term to we're product to high tailwinds spread. park to of from XX Northwest to product for into by product ultimately, expect spread the near park Geneva on spread period the work get be funded going we locations it continuing facilities other on strengthen stuff And over is to -- products product that

at $XX over quarter. are XXXX like $XXX look think $XXX if where of -- the in just the this was we we million in at profit. million million $X you profit million and before, I and gross -- XXXX, revenue. quarter just full of or of something $XXX said to in you it in the Compared was and were if XXXX, So -- revenue third I the million look about third year of gross of And

going obviously, So we're period side. to taking over of time, significantly but locations a to different that organic the on, products with on has and grown that not to company that's spread M&A remain path also only through growth the product

March this grow a dedication lot of in talk just continue year the and the to everybody runway full employees have to about want and the and we all support I business, again of on and thank front look we to ultimately, in to speaking So us forward results. for to their company. going when to call you we And are

very you So thank much.

Operator

conclude Thank teleconference. you. This does today's

have time. this great at day. you lines participation, a for your disconnect and may Thank You your

Northwest Pipe (NWPX) 31 Oct 242024 Q3 Earnings call transcript