Northwest Pipe(US:NWPX)2019-03-14 17:23Financial Data and Key Metrics Changes - The fourth quarter income from continuing operations was $148,000 or $0.02 per diluted share, with adjusted income from continuing operations at $2.6 million or $0.27 per diluted share compared to an adjusted loss of $1.1 million or $0.11 per diluted share in Q4 2017 [6] - Sales increased to $57.5 million in Q4 2018 from $35.6 million in Q4 2017, with gross profit as a percentage of sales improving to 11.8% from 5.1% [7] - For the full year, income from continuing operations was $20.3 million or $2.09 per diluted share, compared to a loss of $8.4 million or $0.88 per diluted share in 2017 [10] Business Line Data and Key Metrics Changes - The Ameron acquisition contributed approximately $19.1 million in sales for Q4 2018 and $30.2 million for the full year [7][13] - Selling, general and administrative costs rose to $4.1 million in Q4 2018 from $3.3 million in Q4 2017, primarily due to $600,000 in acquisition-related costs [8] Market Data and Key Metrics Changes - The backlog, including confirmed orders, reached a record $252 million at year-end 2018, up from $201 million in Q3 2018 and $88 million in Q4 2017 [18] - The company noted strong bidding opportunities in the Texas market, with significant projects funded by the SWIFT program [20] Company Strategy and Development Direction - The company aims to focus on the successful integration of the Ameron Water Transmission Group, improving business performance by prioritizing margin over volume, and driving cost reductions [28] - The company expects continued improvement in revenues and margins throughout 2019, supported by a strong backlog and stable bidding environment [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the first quarter of 2019, expecting it to be stronger than previous years due to current demand levels and a stable competitive landscape [19] - The company anticipates a positive trend in revenue and margins throughout 2019, with a substantial portion of projects being multi-year programs [27] Other Important Information - The company reported using $18.4 million in cash from operations in 2018, with capital expenditures planned at about $12 million for 2019 [15] - At the end of 2018, the company had no borrowings and approximately $50 million available for working capital needs [16] Q&A Session Summary Question: Did the fourth quarter have any negative price cost impact due to steel price movements? - Management indicated that pipe pricing has kept pace with steel price increases, and they expect margins to improve as they work through the backlog [34][35] Question: How does the bidding outlook for 2019 compare to 2018? - Management noted that while 2018 was a strong bidding year, 2019 is expected to be solid with around 200,000 tons of bidding opportunities, not a significant drop from the previous year [36][38] Question: Has weather impacted volumes? - Management acknowledged that weather issues in Texas and California have affected shipments and revenues [40][41] Question: What is the historical gross profit margin? - Management stated that historical gross profit margins have averaged between 15% to 17%, with potential to return to levels above 20% if market conditions remain stable [51][52] Question: How does the Ameron acquisition affect gross profit levels? - Management believes the integration of Ameron will enhance operational efficiencies and improve gross margin profiles [53] Question: What is the current headcount compared to the past? - The total headcount is over 700, with about 228 from the Ameron Group, indicating a strategic approach to resource allocation [56]