Shawcor Ltd Q4 2012 Earnings Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Scott Treadwell - TD Securities - Analyst : Thanks, good morning, gents. Congrats on the quarter. Wanted to touch base on a couple of things. Obviously you've ruled Socotherm into the numbers here, I'm wondering if perhaps on a one-time basis you could give us some idea of, on the revenue side, what Socotherm contributed either regionally or overall to help us recalibrate things going forward?

Question: Scott Treadwell - TD Securities - Analyst : Perfect, and actually that was a follow up. Do you have a startup timing for Lianzi and Julia at this point?

Question: Scott Treadwell - TD Securities - Analyst : Mid year; okay perfect. To move to the Brigden plant -- I'm wondering -- I know you've had a high level of interest in the plant from customers. Any update on incremental deployments or incremental plants at this point?

Question: Scott Treadwell - TD Securities - Analyst : Okay. And finally -- turning to Asia, obviously a substantial jump there in revenue. I'm wondering, does that represent what Asia can do flat out on a quarterly basis? Or is there still incremental capacity there? Or did all the stars align and you shouldn't expect that number as any kind of run rate going forward?

Question: Scott Treadwell - TD Securities - Analyst : Okay, great, guys. Thanks for the color. I'll turn it back to the queue.

Question: Sarah Hughes - Cormark Securities - Analyst : First, Bill, can you talk a little bit about the bid book you're seeing currently? You talk about CAD1 billion -- I'm trying to get a sense of how much at this time you would expect potentially coming into 2014 versus post- 2014?

Question: Sarah Hughes - Cormark Securities - Analyst : And Bill, you talked about Flexpipe in terms of the potential CAD2.6 billion market. How much do you think that percentage of that now is composite?

Question: Sarah Hughes - Cormark Securities - Analyst : And then, on acquisitions, given the change in your balance sheet post the buyout, wondering has your acquisitions focus changed at all from what it was pre the strategic review?

Question: Sarah Hughes - Cormark Securities - Analyst : Great. And then lastly, Gary -- what was the reason for the decline in North American gross margins in the quarter?

Question: Sarah Hughes - Cormark Securities - Analyst : Great, thank you.

Question: Dana Benner - AltaCorp Capital - Analyst : I wanted to start with the issue of margins. 24% is so far beyond the Holy Grail number of 20% at ShawCor that, that makes you really stand up and notice. As we move forward, you've run CAD151 million in Asia-Pac, which would have been a huge contributor to that; you've got Apache Julimar potentially contributing more. Of course, the offset may be that as Socotherm starts to contribute at a higher rate but at lower margins, maybe that pulls back. So maybe give us a sense for margin trends this year. Is 24% the absolute peak that you could achieve with your current structure and it would be foolish to set that out as the marker going forward? Or what you think?

Question: Dana Benner - AltaCorp Capital - Analyst : Well it does. I guess I'm trying to understand impact that Socotherm would have; or is it just not big -- is the build rate not fast enough to impact it this year?

Question: Dana Benner - AltaCorp Capital - Analyst : Right. Will you keep separating out Socotherm for the benefit of us? Or is there a point where you just roll it in and it just becomes, even if I -- sorry, go ahead. companies.

Question: Dana Benner - AltaCorp Capital - Analyst : Moving to the bid list is Browse within the one -- the, quote unquote, in excess of CAD1 billion bid list right now?

Question: Dana Benner - AltaCorp Capital - Analyst : And then, I guess to the next question -- do you think that this process, the elongated process that goes back to September, has aided your competitors in any way in any global region, as its taken ShawCor off line in any particular capacity that it may have aided them for these seven or whatever number of months?

Question: Dana Benner - AltaCorp Capital - Analyst : One final question, if I may. Obvious, the reason for your proposed debt issuance here around the transaction. Why settle at CAD350 million? What's magic about that level?

Question: Dana Benner - AltaCorp Capital - Analyst : You bet, that's all. Thank you.