SOURCE: Northwest Pipe Company

Northwest Pipe Company

November 04, 2015 16:57 ET

Northwest Pipe Company Reports Third Quarter 2015 Results and Announces Conference Call

VANCOUVER, WA--(Marketwired - Nov 4, 2015) - Northwest Pipe Company (NASDAQ: NWPX) today announced its financial results for the quarter ended September 30, 2015. The Company will broadcast its third quarter 2015 earnings conference call on Thursday, November 5, 2015, at 8:00 AM PST.

Third Quarter 2015 Results
Net sales from continuing operations for the quarter ended September 30, 2015 decreased 55.1% to $52.3 million compared to $116.5 million for the quarter ended September 30, 2014. Gross loss was $2.5 million (negative 4.8% of net sales from continuing operations) in the third quarter of 2015, a decrease in profitability from a gross profit of $15.8 million (13.6% of net sales from continuing operations) in the third quarter of 2014. The loss from continuing operations for the third quarter of 2015 was $1.5 million or $0.16 per diluted share compared to income from continuing operations of $5.9 million or $0.61 per diluted share for the third quarter of 2014. 

Water Transmission sales decreased by 48.2% to $39.8 million in the third quarter of 2015 from $76.9 million in the third quarter of 2014. The decrease in net sales was the result of a 35% decrease in production due to reduced demand and project timing and a 21% decrease in selling prices, which was primarily due to lower steel costs. Water Transmission had a segment gross loss of $0.7 million (negative 1.8% of segment net sales) in the third quarter of 2015 compared to a gross profit of $16.6 million (21.5% of segment net sales) in the same quarter of 2014. Water Transmission gross profit decreased in total and as a percent of net sales due to the mix of products produced coupled with significant competition on recent project bids. In addition, gross profit was negatively impacted by a third quarter lower of cost or market charge of $1.1 million and $0.4 million in claims with steel suppliers.

Tubular Products sales from continuing operations decreased 68.4% to $12.5 million in the third quarter of 2015 from $39.6 million in the third quarter of 2014, driven by a 57% decrease in tons sold and a 27% decrease in selling prices per ton. Tubular Products segment gross loss increased to $1.8 million (negative 14.2% of segment net sales from continuing operations) in the third quarter of 2015 compared to $0.7 million (negative 1.9% of segment net sales from continuing operations) in the third quarter of 2014. Gross profit was negatively affected by reduced sales volumes due to lower demand and high levels of imported pipe. 

For the nine months ended September 30, 2015, free cash flow, defined as net cash generated from operating activities after capital expenditures for property, plant and equipment, was $30.1 million, compared to $19.5 million during the nine months ended September 30, 2014.

As of September 30, 2015, the backlog of orders in the Water Transmission segment decreased to approximately $101 million compared to a backlog of orders of $109 million as of June 30, 2015 on virtually the same level of backlog tons. The backlog includes confirmed orders, including the balance of projects in process, and projects for which the Company has been notified that we are the successful bidder even though a binding agreement has not been executed.

Outlook
"We expect fourth quarter revenue and backlog in Water Transmission to improve due to increased second half bidding levels. However, the extremely competitive market conditions and continued collapse of steel prices are expected to restrict revenues and keep margins under pressure for the near term," said Scott Montross, President and Chief Executive Officer of the Company. "In Tubular Products, import pressures, depressed energy prices and the collapsing steel market have created a very challenging environment. We continue to operate Atchison at reduced levels while we explore the sale of the facility."

Conference Call
The Company will hold its third quarter 2015 earnings conference call on Thursday, November 5, 2015 at 8:00 AM PST. The live call can be accessed by dialing 1-888-566-6175 passcode NWPIPE. For those unable to attend the live call, a replay will be available approximately one hour after the event and will remain available until Friday, December 4, 2015 by dialing 1-866-441-1048 passcode 6301.

About Northwest Pipe Company
Northwest Pipe Company is a leading manufacturer of welded steel pipe and tube products. The Water Transmission Group is the largest manufacturer of engineered steel pipe water systems in North America. With eight Water Transmission manufacturing facilities, the Group is positioned to meet North America's growing needs for water and wastewater infrastructure. The Water Transmission Group serves a wide range of markets and their solution-based products are a good fit for applications including: water transmission, plant piping, low pressure and gravity flow, energy, tunnels, river crossings, railroad and highway, large diameter pressure pipe rehabilitation, structural, and industrial. The Tubular Products Group operates a state-of-the-art electric resistance weld mill facility. The Tubular Products portfolio serves a wide range of markets and its quality certified pipe and tube products are good for applications including: oil and gas, structural industrial, fire protection, low pressure and agricultural. The Company is headquartered in Vancouver, Washington and has manufacturing facilities in the United States and Mexico.

Forward-Looking Statements
Statements in this press release by Scott Montross are "forward-looking" statements within the meaning of the Securities Litigation Reform Act of 1995 and Section 21E of the Exchange Act that are based on current expectations, estimates and projections about our business, management's beliefs, and assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements as a result of a variety of important factors. While it is impossible to identify all such factors, those that could cause actual results to differ materially from those estimated by us include changes in demand and market prices for our products, product mix, bidding activity, the timing of customer orders and deliveries, production schedules, the price and availability of raw materials, price and volume of imported product, excess or shortage of production capacity, international trade policy and regulations, the results of our exploration of the sale of our remaining energy tubular products business, including our ability to identify and complete any transactions or other actions as a result of such efforts, our ability to identify and complete internal initiatives and/or acquisitions in order to grow our Water Transmission business and other risks discussed in our Annual Report on Form 10-K for the year ended December 31, 2014 and from time to time in our other Securities and Exchange Commission filings and reports. Such forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements. 

Non-GAAP Financial Measures
The Company is presenting free cash flow which is a non-GAAP measure, to better enable investors and others to assess our results and compare them with our competitors. This non-GAAP measure should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. 

For more information, visit www.nwpipe.com.

   
   
NORTHWEST PIPE COMPANY  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)  
(In thousands, except per share amounts)  
                         
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2015     2014     2015     2014  
                                 
Net sales:                                
  Water Transmission   $ 39,792     $ 76,857     $ 134,479     $ 182,061  
  Tubular Products     12,543       39,648       56,567       119,079  
    Net sales     52,335       116,505       191,046       301,140  
                                 
Cost of sales:                                
  Water Transmission     40,517       60,298       126,430       152,343  
  Tubular Products     14,329       40,387       65,829       117,346  
    Total cost of sales     54,846       100,685       192,259       269,689  
                                 
Gross profit (loss):                                
  Water Transmission     (725 )     16,559       8,049       29,718  
  Tubular Products     (1,786 )     (739 )     (9,262 )     1,733  
    Total gross profit (loss)     (2,511 )     15,820       (1,213 )     31,451  
                                 
Selling, general and administrative expense     4,773       6,489       17,199       17,847  
Impairment of Water Transmission goodwill     -       -       5,282       -  
                                 
Operating income (loss):                                
  Water Transmission     (2,384 )     14,429       (2,566 )     23,673  
  Tubular Products     (2,298 )     (1,155 )     (11,169 )     550  
  Corporate     (2,602 )     (3,943 )     (9,959 )     (10,619 )
    Total operating income (loss)     (7,284 )     9,331       (23,694 )     13,604  
                                 
Other income     24       39       82       2  
Interest income     10       220       173       383  
Interest expense     (195 )     (457 )     (898 )     (1,796 )
                                 
Income (loss) before income taxes     (7,445 )     9,133       (24,337 )     12,193  
                                 
Income tax expense (benefit)     (5,930 )     3,275       (8,642 )     4,364  
                                 
Income (loss) from continuing operations     (1,515 )     5,858       (15,695 )     7,829  
                                 
Loss from discontinued operations     -       (837 )     -       (11,720 )
                                 
Net income (loss)   $ (1,515 )   $ 5,021     $ (15,695 )   $ (3,891 )
                                 
Basic income (loss) per share                                
  Continuing operations   $ (0.16 )   $ 0.62     $ (1.64 )   $ 0.82  
  Discontinued operations     -       (0.09 )     -       (1.23 )
                                   
  Total   $ (0.16 )   $ 0.53     $ (1.64 )   $ (0.41 )
                                 
Diluted income (loss) per share                                
  Continuing operations   $ (0.16 )   $ 0.61     $ (1.64 )   $ 0.82  
  Discontinued operations     -       (0.09 )     -       (1.23 )
                                   
  Total   $ (0.16 )   $ 0.52     $ (1.64 )   $ (0.41 )
                                 
Shares used in per share calculations:                                
  Basic     9,565       9,519       9,558       9,513  
  Diluted     9,565       9,616       9,558       9,595  
                                 
 
 
NORTHWEST PIPE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
         
         
         
    September 30,   December 31,
    2015   2014
Assets:            
  Cash and cash equivalents   $ 635   $ 527
  Trade and other receivables, net     35,422     58,310
  Costs and estimated earnings in excess of billings on uncompleted contracts     38,700     45,847
  Inventories     49,161     72,779
  Other current assets     14,750     17,776
    Total current assets     138,668     195,239
  Property and equipment, net     132,640     132,595
  Other assets     12,111     24,048
    Total assets   $ 283,419   $ 351,882
             
Liabilities:            
  Borrowings on line of credit   $ 6,552   $ -
  Current portion of capital lease obligations     171     2,170
  Accounts payable     10,463     15,480
  Accrued liabilities     9,213     9,071
  Billings in excess of costs and estimated earnings on uncompleted contracts     695     2,835
    Total current liabilities     27,094     29,556
  Borrowings on line of credit     -     45,587
  Capital leases, less current portion     112     225
  Other long-term liabilities     25,391     30,879
    Total liabilities     52,597     106,247
             
Stockholders' equity     230,822     245,635
    Total liabilities and stockholders' equity   $ 283,419   $ 351,882

Contact Information

  • Contact:
    Robin Gantt
    Chief Financial Officer
    (360) 397-6250