SOURCE:
Northwest Pipe Company
2008-07-23 04:00:00
Northwest Pipe Reports Record Results
VANCOUVER, WA–(EMWNews – July 23, 2008) – Northwest Pipe Company (
reported record sales, earnings and backlog for the second quarter of 2008.
Sales in the second quarter ended June 30, 2008 were $112.1 million
compared to $101.9 million in the same quarter of 2007. Net income in the
quarter was $8.4 million, compared to $5.7 million in the second quarter of
2007. Per share earnings were $0.90 in the second quarter of 2008
compared to $0.61 per share in 2007.
Summary of Previous Project Announcements
Over the past three months, the Company announced the following major
projects:
-- $22.0 million Prairie Waters Project for the City of Aurora, Colorado
-- $19.0 million for the Lewis and Clark Regional Water System in South
Dakota
-- $10.6 million energy products order for domestic gas gathering pipe
and pipe for a storage tank farm in Ghana
-- $8.0 million for the Alternative Intake Project Pipeline for the
Contra Costa Water District in California
Water Transmission Results
Revenues for the Water Transmission Group were $74.9 million in the second
quarter of 2008 compared to $73.0 million in 2007. Gross profit in 2008
was $14.8 million, or 19.7% of sales, compared to $15.2 million, or 20.8%
of sales in 2007.
“The Water Transmission Group’s performance was solid throughout the
quarter. Margins declined slightly compared to recent quarters, mainly
due to increased raw material costs, but sales increased sequentially,”
said Brian W. Dunham, president and chief executive officer of the Company.
Tubular Products Results
The Tubular Products Group’s sales were $37.2 million in the second quarter
of 2008, compared to $28.9 million in the second quarter of 2007. Gross
profit for the quarter was $9.8 million, or 26.4% of sales, compared to
$3.6 million, or 12.5% of sales for 2007.
“The Tubular Products results are clearly outstanding,” said Dunham. “In
spite of continuing concerns of a slowing economy, we have seen strong
demand from the energy, agriculture and construction markets. Our costs
are obviously higher due to increasing raw material costs, but the market
has been strong enough so far to support prices that offset these cost
increases.”
Outlook
The Company’s backlog is at an all-time high at $264 million, and the
market continues to look very active over the balance of 2008. The Company
continues to expect the second half of the year to be very strong. “Based
on our backlog, and our current manufacturing schedules, we expect the
Water Transmission Group’s production and revenues to be somewhat better in
the second half of the year than those reported so far. Additionally, we
expect the gross margin percentage in this group to stay at approximately
the same level as we recorded in this quarter,” stated Dunham.
“While the Tubular Products Group’s performance may not match this
outstanding quarter, we do anticipate strong sales and margins in this
Group for the second half of the year,” continued Dunham. “Demand is still
good throughout our product lines and is particularly strong in energy
products.”
“The condition of the economy, rising steel costs, and rising fuel costs
are all risk factors to our expectations,” continued Dunham. “At this
time, we believe steel and fuel costs are likely to remain at elevated
levels, but unlikely to increase significantly over the next several
months. The economy needs to sustain its current levels in order to pass
through these higher costs and, at this time, we do not expect any
significant downturns in the segments we serve. Changes in these
assumptions would, of course, impact our results.”
About Northwest Pipe Company
Northwest Pipe Company manufactures welded steel pipe and other products in
two business groups. Its Water Transmission Group is the leading supplier
of large diameter, high-pressure steel pipe products that are used
primarily for water infrastructure in North America. Its Tubular Products
Group manufactures smaller diameter steel pipe for a wide range of markets
including construction, agriculture, energy, traffic and a variety of other
commercial and industrial applications. The Company is headquartered in
Vancouver, Washington and has ten manufacturing facilities across the
United States and Mexico.
Forward-Looking Statements
Statements in this press release by Brian Dunham and statements in the
“Outlook” section of this press release are “forward-looking” statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Words such as expects, anticipates, intends, plans, believes, sees,
estimates and variations of such words and similar expressions are intended
to identify such forward-looking statements. Such statements reflect
management’s current views and estimates of future economic and market
circumstances, industry conditions, Company performance and financial
results. Actual results could vary materially from the description
contained herein due to many factors, including project delays, changes in
bidding activity, market demand, operating efficiencies, availability and
price of raw materials, availability and market acceptance of new products,
product pricing, competitive environment, and other risks described from
time to time in the Company’s reports to the Securities and Exchange
Commission. The forward-looking statements we make today speak only as of
today and we do not undertake any obligation to update any such statements
to reflect events or circumstances occurring after today.
Conference Call
The Company’s second quarter 2008 earnings conference call will be held on
Wednesday, July 23, 2008, at 8:00 a.m. PDT via live internet webcast. The
conference broadcast can be accessed at the “Investor Relations” section of
the Company’s website located at http://www.nwpipe.com. For those unable
to listen to the live broadcast, a replay will be available at the Investor
Relations section of the Company’s website (www.nwpipe.com) or by dialing
888-566-0620 approximately one hour after the event.
NORTHWEST PIPE COMPANY
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
(Dollar and share amounts in thousands, except per share amounts)
-------------------- --------------------
Three Months Ended Six Months Ended
June 30 June 30
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Net Sales:
Water Transmission $ 74,861 $ 72,979 $ 138,730 $ 140,732
Tubular Products 37,245 28,918 67,379 51,901
--------- --------- --------- ---------
Net Sales 112,106 101,897 206,109 192,633
Cost of Sales:
Water Transmission 60,083 57,815 109,499 111,774
Tubular Products 27,405 25,290 54,207 45,963
--------- --------- --------- ---------
Total Cost of Sales 87,488 83,105 163,706 157,737
Gross Profit:
Water Transmission 14,778 15,164 29,231 28,958
Tubular Products 9,840 3,628 13,172 5,938
--------- --------- --------- ---------
Gross Profit 24,618 18,792 42,403 34,896
Selling, General, and
Administrative 9,285 7,973 17,246 15,275
--------- --------- --------- ---------
Operating Income 15,333 10,819 25,157 19,621
Interest Expense, Net 1,329 1,833 3,135 3,437
--------- --------- --------- ---------
Income Before Income Taxes 14,004 8,986 22,022 16,184
Provision for Income Taxes 5,605 3,324 8,576 5,988
--------- --------- --------- ---------
Net Income $ 8,399 $ 5,662 $ 13,446 $ 10,196
========= ========= ========= =========
Basic Earnings per Share $ 0.92 $ 0.63 $ 1.47 $ 1.14
========= ========= ========= =========
Diluted Earnings per Share $ 0.90 $ 0.61 $ 1.44 $ 1.11
========= ========= ========= =========
Shares Used in Per Share
Calculation:
Basic 9,151 8,940 9,119 8,932
========= ========= ========= =========
Diluted 9,348 9,221 9,330 9,217
========= ========= ========= =========
CONDENSED SELECTED BALANCE SHEET AND OTHER DATA (Unaudited)
(Dollar amounts in thousands)
June 30, December 31,
2008 2007
------------ ------------
Assets:
Cash and Cash Equivalents $ 164 $ 234
Trade and Other Receivables, Net 83,281 49,300
Costs and Estimated Earnings in Excess
of Billings on Uncompleted Contracts 108,514 121,058
Inventories 71,783 62,805
Other Current Assets 9,246 10,487
------------ ------------
Total Current Assets 272,988 243,884
Property and Equipment, Net 188,895 179,977
Other Assets 29,582 29,702
------------ ------------
Total Assets $ 491,465 $ 453,563
============ ============
Liabilities:
Current Maturities of Long-Term Debt $ 6,518 $ 5,851
Accounts Payable 46,982 41,684
Accrued Liabilities 15,920 12,311
Billings in Excess of Cost and Estimated
Earnings on Uncompleted Contracts 5,579 2,514
------------ ------------
Total Current Liabilities 74,999 62,360
Long-Term Note Payable to Financial
Institution 67,824 54,415
Other Long-Term Debt, Less Current
Maturities 34,228 38,921
Other Liabilities 42,204 41,585
------------ ------------
Total Liabilities 219,255 197,281
Stockholders' Equity 272,210 256,282
------------ ------------
Total Liabilities and Stockholders' Equity $ 491,465 $ 453,563
============ ============
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