Northwest Pipe(US:NWPX)2019-05-11 13:21Financial Data and Key Metrics Changes - In Q1 2019, net income was $2.2 million or $0.22 per diluted share, compared to an adjusted net loss of $1.7 million or $0.18 per diluted share in Q1 2018 [3] - Sales increased to $62.6 million in Q1 2019 from $33.4 million in Q1 2018, reflecting a 68% increase in tons produced [3][4] - Gross profit as a percentage of sales improved to 10.5% in Q1 2019 from 4% in Q1 2018 [3] - Selling, general and administrative costs rose to $4.2 million in Q1 2019 from $3.4 million in Q1 2018 due to higher incentive compensation [4] - Income tax expense rate was 8.1% in Q1 2019 compared to a benefit rate of 12.2% in Q1 2018 [5] - Cash provided from continuing operations was $10.4 million in Q1 2019 [5] Business Line Data and Key Metrics Changes - The Ameron acquisition contributed approximately $11.8 million in sales [4] - Backlog, including confirmed orders, was $242 million as of March 31, 2019, down from $252 million in the previous quarter but up from $87 million in Q1 2018 [11] Market Data and Key Metrics Changes - The Texas SWIFT program has funded over $8 billion in projects over the last six years, with ongoing projects expected to continue funding [14] - In California, Proposition 1's $7.1 billion bond for water infrastructure has appropriated 86% of funds for various projects as of the 2017-2018 fiscal year [19] Company Strategy and Development Direction - The company is focused on integrating the Ameron Water Transmission Group, repairing the Saginaw coating facility, improving business performance by prioritizing margin over volume, and driving cost reductions [22] - The company expects strong revenues and margin trends throughout 2019, supported by a stable bidding environment and a solid backlog [21] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter showed stronger performance than in recent years, reversing a trend of slow first quarters [12] - The company anticipates that the next couple of quarters may experience anomalies related to expenses and insurance coverage from the fire at the Saginaw coatings plant [13] - Management expressed confidence in the stability of backlog and bidding activity for 2020, indicating a stronger outlook compared to 2019 [28][29] Other Important Information - The Saginaw fire occurred at a small part of the facility, and the rest of the plant continued to operate normally [32] - The company plans to manage the impact of the fire on financial performance, with expected volatility in the second quarter due to expenses and insurance coverage [36] Q&A Session Summary Question: Can you talk about the backlog and its relation to the Ameron acquisition? - Management acknowledged that there is still considerable work from the Ameron transaction and expects to continue working through it at least until the third quarter [24] Question: How do you view the bidding environment for 2020 compared to this quarter? - Management indicated that 2020 looks stronger than 2019, with multi-year programs contributing to a stable bidding environment [28] Question: Can you quantify the impact of the Saginaw fire on financial performance? - Management stated that the fire's impact is manageable, as it occurred in a small part of the facility, and the rest of the operations are running normally [32][34]